How Is UPI Revolutionizing The Credit Card Payments Ecosystem?

These past few years have seen a seismic shift in how we, as Indians, pay for goods and services. Cash, which long dominated transactions, is declining rapidly. With UPI, digital payments are taking over the financial landscape. Credit Cards are also not very far from this revolution. In this blog post, we’ll look a bit deeper into how UPI is revolutionizing your credit card payment ecosystem. 

Launched back in 2016, UPI enabled bank-to-bank transfers via mobile apps. UPI’s popularity skyrocketed due to its convenience, ease of use, and security. It crossed 11.23 billion transactions in the fourth quarter of 2023, exceeding debit and credit card payments. This dramatic growth has been enabled by payment apps that simplify UPI transactions and onboarding. 

Small Transactions Making Big Differences:

UPI is displacing cases for small-value everyday spending for groceries, cab, rides, food delivery, and other daily expenditures. The case of scanning a QR code or entering a VPA is replacing the need to carry cash. Even street vendors and small shops now readily accept UPI payments. 

Peer-to-peer transfers have also become seamless. Splitting bills, paying friends, reimbursing expenses, or to send money to family no longer needs bank details. All you need is a UPI ID or a QR code, and the rest is assured. 

Merchants are also preferring UPI over other payment methods. Earlier, shops and websites needed payment gateways and complex integrations to accept cards for rent payment or other such important transactions. Now, UPI removes the friction and cost for merchants. Settlement is instantaneous in their bank accounts. Conversion rates are also high in UPI. 

Leading UPI payment apps now offer more discounts and cashback to make payments with credit cards. This gives you an opportunity to use your credit card for small purchases without any hassle of entering card details every time. Purchases and payments can be made instantly without needing a physical card. 

UPI charges merchants significantly lower fees than traditional credit card networks like VISA and MasterCard. This is accelerating its acceptance among retailers. You also get reward points and lucrative deals while using Credit Cards for UPI payments and to recharge phone. UPI payment apps offer more personalized deals and offers to attract and retain customers. 

Hassle-Free Onboarding Process:

UPI payment apps have minimal KYC requirements to create a minimal onboarding process for credit cards. With a RuPay credit card, you can make UPI payments instantly. This can be used to make all the bill payments like mobile recharge, rent, or electricity bills. For users, it offers speed, convenience, and accessibility. Meanwhile, for merchants, it provides instant settlement, lower costs, and a better customer experience. 

Final Thoughts:

The advent of UPI and its incorporation with credit cards is revolutionizing bill payments. With UPI & credit cards, making bill payments has become easier and more convenient. Here, modern and innovative fintechs have a golden chance to disrupt the card market using UPI-based payments. 

The era of instant, mobile, and digital payments has only just begun. We are likely to see UPI continue its explosive rise over the next decade. The payment landscape may look very different in a few years!