UPI Credit Cards Explained: The Future of Credit Transactions

UPI Credit Card, introduced and approved by the Reserve Bank of India in June 2022, is a credit card (also available in physical form) that enables payments through UPI. Instead of debiting the amount from a bank account or an existing credit card, the payment is charged to the linked UPI Credit Card. Known as the RuPay Credit Card, it is currently limited to making payments to merchants who accept this payment method.

In the Paytm app, the UPI credit card option will appear only when the merchant accepts it. If the merchant doesn’t support it, the option will not be visible, and you won’t be able to use it.

The daily transaction limit for UPI credit card payments is ₹1 lakh, but for certain merchant categories (like specific merchants with special codes), the limit may go up to ₹2 lakh. However, these payments will still be subject to the available credit limit on your card.

There are no charges for linking your credit card or for making transactions. However, a surcharge will apply for payments through credit cards at specific merchant categories, such as fuel stations. Small offline merchants will not be charged a fee for transactions under ₹2000.

Here’s how it works: When you make a transaction using your UPI Credit Card, the payment amount will not be debited from your existing credit card. Instead, the amount will be charged directly to your UPI Credit Card. For example, if you make a ₹10,000 purchase and choose the “Pay with UPI” option at checkout, you can select your linked UPI credit card as the payment method. The amount will be charged to your UPI credit card, and you’ll authenticate the payment using your UPI PIN.

Once the transaction is complete, the amount spent will show up on your credit card statement at the end of the billing cycle. You can then repay the amount in full or in installments, depending on your card’s terms.

This feature offers a secure, fast, and convenient way to make payments while using your credit card limit. Plus, many UPI credit cards provide rewards or cashback, enhancing the overall experience.

How Does UPI Credit Card Work?

1. Link your credit card: Add your UPI credit card to a UPI app like Paytm.
2. Choose credit card for payment: Select your UPI credit card as the payment method when making a transaction.
3. Authenticate the payment: Use your UPI PIN to confirm the payment.
4. Payment deducted from credit card: The payment is charged to your credit card instead of your bank account.
5. Bill payment: The amount will appear on your credit card bill, which you can pay by the due date.

Features of UPI Credit Cards

• Seamless Integration: Link your credit card to UPI apps like Paytm for smooth transactions.
• Payment from Credit Limit: Payments are charged to your UPI credit card, not your bank account.
• Instant Payments: UPI credit cards enable real-time payments for both online and offline purchases.
• Security: Transactions are secured with UPI PIN authentication.
• Credit Line: Payments accumulate on your credit card bill, to be paid by the billing cycle’s due date.
• Reward Points: Many UPI credit cards offer rewards or cashback on transactions.
• 24/7 Accessibility: You can use UPI credit cards for payments anytime, anywhere.
• No Physical Card Required: Transactions can be made via the UPI app without needing to carry a physical credit card.

How to Link RuPay Credit Card on Paytm?

Step 1: Open the Paytm app and go to the ‘Loans & Credit Cards’ section.

Step 2: Click on ‘View All’ and then on ‘Link RuPay Credit Card to UPI’

Step 3: Select your issuing bank from the drop-down menu.

Step 4: Based on the mobile number registered with your bank, your masked credit cards will appear on the screen.

Step 5: Choose the credit card you wish to link and confirm.

Step 6: Proceed to set up your UPI PIN to complete the linking process.

Once linked, you can easily scan and pay using your credit card via UPI on supported merchants.

How to Make a Payment Through UPI Credit Card on Paytm?

Step 1: Open the Paytm app on your phone.
Step 2: Tap on ‘Scan & Pay’ or ‘To Bank A/c or UPI ID’.
Step 3: Scan the merchant’s or receiver’s QR code, or enter their UPI ID, then click on ‘Pay’.
Step 4: Select your UPI credit card from the list of available payment methods.
Step 5: Confirm the payment by entering your UPI PIN.