Economics
In News: The Reserve Bank of India has proposed to allow the linking of credit cards with the Unified Payments Interface (UPI).
- RBI also stated integration will first begin with the indigenous RuPay credit cards.
What is the significance of the move?
- Experts believe that the linkage of UPI and credit cards could possibly result in credit card usage zooming up in India given UPI’s widespread adoption.
- The integration also opens up avenues to build credit on UPI through credit cards in India, where in the last few years, a number of startups have emerged
- The move could also be a push to increase adoption by banking on UPI’s large user base.
- So far, UPI could only be linked to debit cards and bank accounts.
Unified Payments Interface (UPI):
- It is an advanced version of Immediate Payment Service (IMPS)- round–the-clock funds transfer service to make cashless payments faster, easier and smoother.
- UPI is a system that powers multiple bank accounts into a single mobile application merging several banking features, seamless fund routing & merchant payments into one hood.
- UPI is currently the biggest among the National Payments Corporation of India (NPCI) operated systems including National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar enabled Payment System (AePS), Bharat Bill Payment System (BBPS), RuPay etc.
- The top UPI apps today include PhonePe, Paytm, Google Pay, Amazon Pay and BHIM, the latter being the Government offering.
- NPCI launched UPI with 21 member banks in 2016
Source: Indian Express
