India’s central bank on Wednesday proposed an integration between UPI and credit cards to significantly boost a fast-growing payment protocol that has become the most popular way individuals in the market share. South Asian school trading online.
“UPI facilitates transactions by linking savings or checking accounts through users’ debit cards,” said Shaktikanta Das, Governor of the Reserve Bank of India at a meeting. meeting.
He said: “Now the proposal to link credit cards on the UPI platform with RuPay credit cards will be linked to UPI. Rupay is India’s homegrown card network, promoted by the National Payments Corporation of India, a special agency of the RBI that also oversees UPI payments.
UPI, a five-year-old payment protocol built by a consortium of retail banks, is the most popular way Indians transact money. In May, the UPI network processed more than 5.9 billion transactions, up from 21 million in the same period five years ago.
Allowing UPI to work on credit cards “will provide additional convenience for users and increase the reach of digital payments,” he said.
The governor did not share the monetization aspect of UPI transactions made on credit cards.
UPI currently doesn’t have a monetization model, which many fintech executives have expressed concern about and ask the RBI to re-evaluate. This lack of information is also important because credit card tools operate on some of the highest merchant discount rates, which are split between banks and payment service providers.
At the briefing, the Central Bank also raised the prime interest rate for the second consecutive month. RBI’s rate-setting board voted unanimously to increase the buyback rate by 50 basis points to 4.90%.
“Inflation has risen sharply beyond that threshold,” said Das. “A large part of the increase in inflation is mainly due to a series of supply shocks that could be related to war.”
