UPI now offers a payment option for their customers on a credit basis on the direction of the Reserve Bank of India (RBI). Initially, the credit-based service was being provided directly by banks through credit cards only. But now the National Payment Corporation of India (NPCI) is taking a step ahead by offering credit lines for the users back to back as some time ago it launched UPI ATM also. Basically, a Unified Payment Interface (UPI) Credit line is an overdraft facility provided by the bank for the users of UPI.
Why UPI Credit Service?
Many Banks offer overdrafts or credit facilities to their customers through their credit cards in case of insufficient balance in their account in the lieu of interest. To make the payment options convenient for the people NPCI introduced the UPI service. UPI brings revolutions in the banking sector as it is very fast and secure while making payments with a variety of options. Now, banks are also looking for the new change along with UPI.
Nowadays people hesitate to bring credit and debit cards in their wallets because of security purposes. In that case, payment with mobile banking even with UPI relieves the users from card burdens. In this revolution, the UPI credit line will bring a great change in the history of banking. Earlier lots of documentation needs to be maintained to avail credit card facility with many more things to be followed up. UPI credit lines relieve users from the burden of documentation and also with an easy and fast option to repay the credit amount.
How to Use UPI Credit Line?
It is similar to earlier using credit cards. UPI credit line is a pre-approved credit service offered by the banks with their scheme “Buy Now, Pay Later”. User can make use of pre-approved credit services after taking consent from their banks through many UPI apps like Google Pay, Paytm, Mobikwik, Amazon Pay, etc. Some banks may offer the service interest-free also.
Banks Offering UPI Credit Line.
Initially, as of now, ICICI and HDFC banks are offering UPI credit services. ICICI bank offers a unique ID for every Pay Later account while HDFC charges a time activation of Rs. 149 for the credit line. Both banks are offering credit lines with limits up to Rs. 50,000.
Conclusion
This new feature of UPI Now, Pay Later: UPI credit line will play a major role in the payment ecosystem of India. Although, credit cards and UPI credit lines both are offer credit but the major difference is that UPI credit services require minimum documentation and accessible to large groups of people with no need to keep physical cards in their wallets every time. This new feature of payment will be more flexible for users and open more avenues for banks who want to expand their services.
Nupur Tanan
"Nupur Tanan" works at Financewisdom.in. She has experience in writing a vast range of varied content. She write knowledgeable, well-researched, and engaging articles on various personal finance and banking related topics.