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There are nearly 250 million users who use digital payments system Unified Payments Interface (UPI); and about 30 million of them are credit card holders. These credit card users spent Rs 112,357 crore ($13.7 billion) in August, or 47% of UPI merchant transactions. These users now have an option to move some of their spending from their bank account to their credit cards, while using the digital payments system.

Last week, at the Global Fintech Fest in Mumbai, National Payments Corporation of India (NPCI), the retail payments body that runs UPI, launched launched RBI allows credit cards to be linked to UPI; RuPay credit cards first in line The Hindu Read more this feature. To make a transaction, users can simply pick the credit card from which they would like to make the payment.

“Credit is a big bet for NPCI,” says a senior payments industry executive. They did not want to comment publicly on the matter.

With this rollout, RuPay credit card holders of Punjab National Bank, Union Bank of India, and Indian Bank will be the first to be able to use this feature on NPCI’s digital payments app— BHIM BHIM The Ken The unlikely story of BHIM, the upsetter of plans Read more . Other apps don’t support it yet. “This feature is not on our product pipeline at least for this year,” says an employee at a payments company. It is expected to take at least six months for this feature to be available on the likes of PhonePe, and Google Pay.

But, before the apps can support it, NPCI needs to get banks’ buy-in at two levels—to support RuPay credit cards on UPI, and more fundamentally, to issue more RuPay credit cards.

NPCI runs a dozen retail payment systems from other payment systems like Rupay Rupay The Ken RuPay’s loss is UPI’s gain Read more debit cards, Immediate Payment Service (IMPS), Aadhaar Enabled Payment System (AePS) to digital toll collection system FASTag. One of its core products that hasn’t seen as much uptake though is RuPay credit cards.

It was launched in 2017 to compete with American card networks Visa and Mastercard. Since then, only about three million RuPay credit cards have been issued of the total 78 million credit cards. So far, about 10 banks including large credit card issuers like HDFC Bank, SBI Card, Axis Bank accept these credit cards.

But banks are being cautious about these credit cards because they can’t make as much money via RuPay.

AUTHOR

Arundhati Ramanathan

Arundhati is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She writes the newsletter Ka-Ching! every Monday. She lives in Bengaluru and has spent over 12 years reporting and writing on various subjects.

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