Deepti Sanghi, Co-Founder and CEO, Kodo.
“The announcement by RBI on linking UPI platforms with credit cards is indeed a welcome move. UPI is increasingly becoming one of the most favoured payment alternatives for consumers transacting online; with Rs. 594.6 crore transactions amounting to Rs 10.40 lakh crore in the month of May 2022 alone. RBI has offered a lucrative solution of synchronising credit cards on UPI platforms, this move will encourage the reach and utility of both credit cards and UPI. The acceptance infrastructure for credit cards can dramatically increase as merchants will be able accept credit card payments over their UPI accounts. A number of our corporate card customers have requested for the ability to link their cards to UPI to be able to make all kinds of payments related to their company expenses seamlessly.
However, since there is no MDR charged to merchants for UPI payments, there is an open question of how will the credit card issuers cover their cost of capital and how will the underlying infrastructure support this. We are confident that the RBI, the banks and the NPCI will collaboratively formulate a directive, keeping all essential factors in mind.