According to the Reserve Bank of India (RBI), the plan to connect UPI with RuPay credit cards will make it possible for companies to embrace UPI and provide several use cases for merchants, including overdraft capabilities, capture and hold facility, and invoicing assistance.
The linking should increase UPI person-to-merchant (P2M) transaction volume, which was INR. 769 in July 2022. According to the RBI, the decision would also help P2M transactions account for a larger percentage of overall UPI transactions.
At the time of the regulation change’s announcement in June, RBI Governor Shaktikanta Das stated that “over 26 crore unique users and 5 crore merchants are on the UPI network.” The National Payments Corporation of India (NPCI) reports that in July 2022, UPI completed 628.8 crore transactions worth over INR 10.63 lakh crore, of which 299.9 crore were P2M transactions worth INR 2.30 lakh crore.
During the same time period in the previous year (July 2021), 324.7 crores UPI transactions worth 6.06 lakh crore rupees were handled, of which 125.7 crore were P2M transactions worth INR 99,597 crore.
The RBI’s belief that linking will attract more merchants to the platform was shared by fintech as well. Especially in semi-urban and rural locations, many businesses do not yet have credit card point of sale (PoS) terminals, although all of them accept payments using UPI QR codes.
According to Mandar Agashe, founder and managing director of the payment’s solution provider Sarvatra Technologies, all of these shops would be able to take credit payments using UPI.
Because customers now have a variety of payment options, the linking will promote the adoption of UPI even for expensive purchases. As a result, it will increase the reach of digital payments in India and strengthen merchant relationships with card networks, first with the domestic RuPay system and later with other global players like Visa and Mastercard to improve the customer payment experience, according to Muralidharan Srinivasan, Head of Payments, APMEA Region, FIS. The business offers technological solutions to businesses, banks, and capital markets organizations all around the world.
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