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Why Using Credit Cards with UPI is Truly Innovative

Over the last two decades, we have witnessed a staggering growth in the penetration and acceptance of credit cards as alternative payment methods. These plastic cards have gone from prestigious financial tools accessible to few to common payment channels.

While this change in mindset and spending habits can be attributed to growing financial literacy, financial institutions have made it extremely easy to get access to a credit card. Today, you can apply for credit card online without leaving the comfort of your home, and finish your credit card application within an hour.

Similar to the explosion of credit card usage, over the last seven years, we have witnessed a paradigm shift in the payments ecosystem in the country. India’s ‘Digital Payment Revolution’ led to the ideation and creation of the Unified Payments Interface (UPI), which streamlines digital payments. This evolution in cashless payments extends unprecedented convenience and facilitates direct payments linked to your bank account.

Evolving Cashless Payments Landscape

With UPI pushing the country’s transition to cashless payments into overdrive, millions of Indians have started using UPI to send and receive payments. Today, various banks allow their RuPay credit cards to be linked to the Unified Payments Interface, facilitating credit card transactions with utmost ease and convenience.

At a time when QR codes are placed at merchant point-of-sale (POS) – from auto-rickshaws to general stores, this innovative concept will further simplify credit card transactions. Now, you won’t have to carry your credit card to make payments, and you can use your RuPay credit card to pay for a wide range of products and services.

RBI and NPCI’s decision to permit credit cards to be the source of funds for UPI payments can be a watershed moment for India’s credit industry. More customers will be able to purchase goods on credit, increasing purchase volumes. This will directly impact the country’s economy, as it will give rise to ancillary businesses, leading to employment generation.

Benefits of Using Credit Cards With UPI

Similar to RuPay credit cards, it won’t be long before other banks follow suit, allowing consumers to link their credit cards to UPI. The following are a few of the benefits of using credit cards with the Unified Payments Interface.

  • Greater Convenience: Once you link your credit card to UPI, you can make payment directly from your credit card using UPI-enabled mobile applications. You won’t have to carry your credit cards or provide your credit card details for every transaction.
  • Wider Acceptance: In recent years, UPI has gained widespread acceptance across online and offline merchants. You can leverage this extensive network by linking your credit card to UPI, and make cashless payments at different establishments.
  • Secure Transactions: One of the biggest selling points of UPI transactions is their secure nature, as they have multiple layers of authentication. By linking your credit card to UPI, you can remain assured that your card details remain encrypted during transactions. This significantly reduces the risk of fraudulent transactions.
  • Rewards and Benefits: With credit cards offering reward points, cashback, and other benefits on transactions and bill payments, you can earn these rewards and benefits by using UPI for payments.
  • Bill Payments: UPI is one of the most widely used platforms for paying utility and credit card bills. UPI’s interoperability enables you to make payments from the same platform so that you can avoid late payment fees and penalties. Additionally, you can use your RuPay credit card – or any other credit card to make bill payments with just a few taps.

Democratisation of Credit Card Payments

From applying for a credit card online to linking it to UPI, we are on the verge of democratising credit – and credit cards in the country. This could encourage credit card issuers to implement ‘low and grow’ strategies. Those who apply for a credit card online with a low credit score can receive cards with a low credit limit, which can be increased based on how the cardholder handles this credit.

By making credit cards more accessible, we can also witness democratisation of credit card payments on UPI and an increased credit penetration in the country. It will also allow individuals to upgrade their lifestyles and better manage the credit available to them.


Currently, RuPay credit cards can be linked to UPI, which offers cardholders a wide range of benefits. They can enjoy a seamless and secure payment experience and can either scan the QR code or make online payments. Certain banks also allow customers to convert transactions above ₹4,000 – ₹5,000 to EMIs, making high-value purchases affordable.

Linking a credit card to UPI is a game-changer for the credit industry and can boost the Indian economy. Democratisation of credit and employment generation are two of the biggest benefits that could arise from this decision.

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