RuPay credit card: Same rewards, benefits for UPI transactions from Sept 1

According to NPCI, RuPay credit cards on UPI are not getting the same rewards and benefits as other RuPay credit card transactions

Starting September 1, you’ll see the same benefits and reward points on your RuPay credit card for UPI transactions as you do for other RuPay credit card transactions. This comes after the National Payments Corporation of India (NPCI) instructed banks to ensure that there’s no difference in the rewards and benefits for RuPay credit cards used on UPI versus regular credit card transactions.

What did the NPCI directive say?

The NPCI noticed that RuPay credit cards on UPI weren’t getting the same rewards and benefits as other RuPay credit card transactions. To fix this, they issued a circular on August 5 stating, "Issuers shall ensure that reward points, benefits, features, and other ancillary offers should not be lower (directly & indirectly) for RuPay Credit Cards on UPI transactions and RuPay credit cards, except for transactions where issuer does not earn any interchange fee."

 

Any exceptions?

Yes, the only exception is for transactions where the issuer doesn’t earn any interchange fee. In those cases, the parity rule won’t apply.

How did we get here?

In June 2022, the Reserve Bank of India (RBI) allowed RuPay credit cards to be linked with UPI, which was previously used only as a pay-now facility. Then, in October 2023, the NPCI introduced interchange fees for RuPay-UPI transactions. For transactions over Rs 2,000, this fee is around 2%, but don’t worry—you won’t have to pay anything extra when making purchases.

Benefits of UPI transactions via RuPay credit cards

RuPay credit cards on UPI make using credit easier and more digital-friendly for customers. Merchants also benefit by accepting credit cards through QR codes, which can boost their sales. Currently, 16 banks, including major banks like Punjab National Bank (PNB), Union Bank, Indian Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, and ICICI Bank, offer this service.

Why are RBI and NPCI promoting RuPay credit card transactions via UPI?

Both RBI and NPCI see credit on UPI as a breakthrough, making access to credit simpler and more affordable. Credit on UPI is available through two main channels: ‘RuPay credit card on UPI’ and ‘Credit Line on UPI’. According to NPCI Managing Director and CEO Dilip Asbe, UPI credit transactions are hitting Rs 10,000 crore every month, with most of it coming from RuPay credit cards on UPI.

Speaking at the Global Fintech Fest in Mumbai, RBI governor Shaktikanta Das, shared that the banking regulator is focusing on making UPI and RuPay truly global, driven by the encouraging response received from several countries. He noted that progress has already been made in expanding UPI to countries such as Bhutan, Nepal, Sri Lanka, Singapore, the UAE, Mauritius, Namibia, Peru, and France. Das praised the efforts of the NPCI and his colleagues at the RBI, stating, "We must resolve to do more in this national endeavour."

This push to take UPI global follows a series of strategic developments. UPI, an instant real-time payment system developed by NPCI, was designed to facilitate inter-bank transactions via mobile phones. Alongside UPI, NPCI also developed RuPay, a debit and credit card network that competes with international giants like Visa and Mastercard.