In News: The Reserve Bank of India (RBI) permitted the linking of Rupay credit cards to UPI accounts, thereby allowing the plastic to be used for smaller transactions as well. Most major banks now offer Rupay credit cards that can be linked to your UPI account, irrespective of the category of the card.

  • Most banks are offering virtual only card options now. It is a separate card and its credit limit is within the overall limit assigned to the primary card that the customer has. Customers who show interest specifically in UPI transactions see value in these virtual cards as they don’t want to swipe them at points of sale (POS) machines.
  • The biggest pull of the UPI payment method is convenience, which is now available to credit card users as well. “In tier II and below cities, not every small merchant has a POS (point of sale) machine, whereas even a roadside snacks stall now has a UPI QR code. All such small payments that a credit card holder had to earlier compulsorily make from their bank savings account can now be directed to credit cards.
  • There is no restriction of linking RuPay Credit Card on UPI. There is no limit for the number of transactions carried out from linked Credit Card on UPI. Amount limit per card per day – UPI limit (1 lakh per day and 2 lakhs for some special MCC codes), however it will be limited to the available credit limit on your card.
  • Customers will not be charged for linking or carrying out any transaction from the linked Credit Card on UPI.


  • Only customer-to-merchant UPI payments are allowed through credit cards. This is done to ensure that people don’t revolve credit by transferring money to bank accounts of friends and relatives.
  • Any payment being made to a UPI ID or QR code that belongs to an individual and not a merchant will not show a credit card as a payment option. So, for instance, if an auto driver offers his personal and not business UPI QR code for payment, then you can’t pay for your ride using a credit card.
  • Even though UPI payments through credit cards have fared well since its launch, some big merchants have stopped accepting payments through this option.
  • That includes IRCTC and Mother Dairy, said Mandal. This is because payments through credit cards carry Merchant Discount Rate, or MDR, cost—a fee that a business has to pay to a bank or card company that processes its card or digital transactions. In regular UPI payments, merchants don’t have to pay MDR. “Businesses have to pay 1.7-2% in MDR, which is higher than what is charged on POS credit card transactions,” said Manda.

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