Credit and finance for MSMEs: After the Reserve Bank of India (RBI) allowed linking RuPay credit cards to the Unified Payment Interface (UPI) last year, the National Payments Corporation of India (NPCI), which operates retail payments and settlement systems in the country, has joined hands with various payment aggregators to enable merchant transactions through RuPay credit cards on UPI. “NPCI has enabled key aggregators like BharatPe, Cashfree Payments, Google Pay, Razorpay, Paytm, PayU and Pine Labs to enable merchant transactions through RuPay credit cards on UPI in the Indian market,” NPCI said in a statement on Wednesday.
Earlier, UPI customers were able to make transactions only through their bank accounts, overdraft accounts, and prepaid accounts. NPCI said the linkage will ensure that customers no longer have to carry their credit cards with them for payments.
Also read: Rapid explosion of digital merchant payments (P2M) to disrupt payments landscape: Report
“After the RBI’s decision to start linking RuPay credit cards to UPI, we immediately started enabling leading payment aggregators to boost merchant acceptance and customer awareness in a bid to attract early and widespread adoption. The support of all partners has been instrumental in helping us achieve this,” said Nalin Bansal, Chief of Corporate and Fintech Relationships and Key Initiatives, NPCI.
Bansal said NPCI will aim to explore more relevant avenues to promote the adoption of digital payments via credit cards on UPI. UPI has attracted over 250 million unique users and five crore merchants over the last few years. The credit card-UPI linkage will benefit merchants, particularly those in semi-urban areas where card point-of-sale (PoS) terminals are not widely available, said NPCI. As per the RBI Payments Vision for 2025, credit-based payment transactions are likely to increase by 16 per cent year-on-year for the next four years.
Also read: Merchant credit card for MSME traders soon
Payment aggregator, also known as merchant aggregator, is a third-party service provider or a middleman that allows merchants to accept payment through cash/cheque, e-wallets, online payments, credit or debit card payments, cash cards, etc., from customers through various bank accounts or financial institutions without the need to set up a merchant account in each bank.
RBI in February this year had granted in-principle approval to 32 entities including Amazon Pay India, Google India Digital Services, Zomato Payments, Razorpay Software, Reliance Payment Solutions, etc., to operate as online payment aggregators.
The latest move by NPCI is expected to further boost merchant adoption of UPI. Meanwhile, the peer-to-merchant (P2M) UPI transactions had reported a 119 per cent growth in February 2023 to 415.32 crore from 189.58 crores in February 2022, as per the NPCI’s UPI data. The value of transactions had also jumped by 71.1 per cent from Rs 1.63 lakh crore in February 2022 to Rs 2.79 lakh crore in February 2023.
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