New Delhi: In a transformative step towards enhancing digital payment options in India, the National Payments Corporation of India (NPCI) is set to launch a groundbreaking product utilising the Unified Payments Interface (UPI) as a credit card alternative. This innovative approach follows the Reserve Bank of India’s (RBI) recent approval for banks to offer credit lines through UPI, marking a significant evolution in India’s digital financial ecosystem.
The upcoming UPI-based credit feature will allow users to access a predefined credit limit, akin to traditional credit cards, but with the convenience of UPI’s seamless payment infrastructure. Customers will only pay interest on the amount utilised from this credit line, offering flexibility and cost-effectiveness compared to conventional credit card usage. Importantly, there will be no upfront fees for using this credit line initially, making it an attractive option for consumers looking to manage their finances without additional costs.
Several leading banks, including Axis Bank, HDFC Bank, ICICI Bank, Indian Bank, and PNB, have already integrated this feature, enabling their customers to leverage UPI for shopping transactions. This move not only expands UPI’s utility beyond peer-to-peer payments but also positions it as a versatile platform for broader financial services.
UPI revolutionising digital payments
Since its inception eight years ago, UPI has revolutionised digital payments in India, becoming the preferred mode of transaction for millions due to its convenience, security, and lower transaction fees compared to traditional payment methods. According to industry reports, UPIs currently dominate online transactions, with a significant majority of consumers preferring it over digital wallets and traditional debit or credit cards.
The integration of various payment solutions within the UPI framework, such as UPI Lite and interoperability with RBI’s Central Bank Digital Currency (eRupee), underscores NPCI’s commitment to enhancing financial inclusion and digital accessibility. These initiatives not only simplify payment processes but also empower users with efficient and secure digital payment options.
As NPCI prepares to roll out the UPI-based credit feature, it aims to further streamline financial transactions and empower consumers with greater control over their spending and credit management. This development not only strengthens UPI’s role as a cornerstone of India’s digital financial infrastructure but also sets the stage for future innovations in digital payments.
Discover how UPI is reshaping digital transactions with its innovative credit feature, allowing users to shop now and pay later seamlessly. NPCI’s latest move integrates credit functionality into UPI, promising a convenient and fee-friendly alternative to traditional credit cards. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
