NPCI to soon start pilot project of Credit card on UPI with banks

The National Payments Corporation of India (NPCI) will commence a pilot project of enabling credit cards on unified payments interface (UPI) over the next two months and is primarily in discussions with public sector card companies like SBI Card, PNB Cards and Union Bank for the test run.

An NPCI official said, “NPCI is trying to make it live by the end of August or September. It will start with a pilot, with a few banks who are ready to start this. There are some players like SBI Card, PNB Cards, Union Bank have shown interest, in addition to Axis Bank on the private side.”

NPCI will integrate the UPI AutoPay feature with credit card transactions, aiming to reduce the risk of defaults on credit card payments. The UPI AutoPay allows users to make recurring payments on the UPI platform for smaller amounts.

Currently, UPI allows linking of bank accounts by mapping a bank account linked with a mobile number through third-party apps like Google Pay, Amazon Pay, PhonePe, etc or the apps of banks like SBI, ICICI Bank, Axis Bank, HDFC Bank, etc.

The linking of credit cards with UPI will enable consumers to make small ticket sized payments on credit issued to them through bank issued credit cards. Last month, the central bank RBI allowed linking of credit cards with UPI in an effort to provide additional convenience to users and enhance the scope of digital payments.