RuPay credit card holders of several banks can now make Unified Payments Interface (UPI) transactions using Google Pay. The users can make UPI payments by scanning the merchant’s UPI QR code at any desired location and even do offline transactions. According to reports in 2021, India accounted for 40 per cent of the total digital transactions globally. UPI has made it easy and universal to go cashless anywhere with just a smartphone and mobile number linked to their bank accounts.
UPI transactions can be done through credit and debit cards via QR code scanning or through single-click app transfer. But did you know that even if you have having low balance at your bank, you can still pay through UPI?
The Reserve Bank Of India (RBI) has now allowed banks to offer a credit line facility to UPI users. This means a user can spend from a pre-sanctioned credit line and repay the bank later. In the notification issued on September 4, the RBI said that under this facility, payments through a pre-sanctioned credit line issued by a scheduled commercial bank to individuals, with the prior consent of the individual customer are enabled for transactions using the UPI system. But how does it work?
This facility can be used through UPI applications such as Google Pay, Paytm, MobiKwik and mobile banking UPI applications as per the bank websites. The banks first have to obtain consent from the customer to set up a credit line with a specific limit. Once it gets approved, the user can spend that pre-sanctioned amount through the UPI app and clear their dues later by the due date.
Some banks charge interest on the amount used in the credit line, while some offer a credit-free period, which means for a predetermined period there will be no interest on the amount being used if it is repaid.
Among popular banks, HDFC Bank and ICICI Bank have already launched their credit lines- HDFC UPI Now Pay Later and ICICI PayLater. HDFC charges Rs 149 to activate the service while ICICI bank is not charging any fee for activating the service but there is a service charge if one uses more money than the limit set by the bank. Both the banks have kept the credit limit of Rs 50,000 with eligibility criteria.
Source By: news18
