RuPay Credit Card
Unified Payments Interface (UPI) has brought a revolution in the world of digital payments in India. This system developed by National Payments Corporation of India (NPCI) has completely changed the way of sending and receiving money through mobile. It is so easy and fast that today almost everyone, from vegetable vendors to big shopping malls, is using it. Now a new chapter has been added to this revolution of RuPay Credit Card. Now you can also make payments by linking your RuPay credit card to UPI. But along with this facility a big question has also arisen, is it really free?
₹2000 limit, relief for customers
The first and most important thing that every common customer should know is the limit of ₹2,000. NPCI has kept the rules very clear. If you make any payment up to ₹2,000 (two thousand rupees) through UPI using your RuPay credit card, you will not be charged any charges. It is completely free.
This rule is important because most daily UPI transactions in India, such as groceries, small bills, cab fares or eating out, take place within this limit. This step has ensured that there is no additional burden on the daily needs of the common man. You can use your RuPay credit card on UPI for small payments without any worries. It is as free as doing UPI from your bank account.
So what is the truth about the 1.1% fee?
Now let us come to the fee which is discussed the most. It is true that from April 1, 2023, NPCI has implemented a rule under which RuPay credit card UPI payments of more than ₹2,000 are charged. This fee can be up to 1.1%. But there is a big catch here which is important to understand, this fee is not to be paid by the customer.
This fee, which is called ‘Merchant Discount Rate’ (MDR) in technical language, has to be paid by the merchant or shopkeeper to whom you are making the payment. For example, if you buy goods worth ₹ 25,000 from a big electronic store and pay through RuPay credit card UPI, then the shopkeeper will have to pay a fee of up to 1.1% on that ₹ 25,000 to his bank. Only ₹25,000 will be deducted from your pocket, i.e. from the customer’s account.
Why was this fee imposed?
It is natural to raise the question that when everything was going well, why was there a need to impose this fee? The answer lies in making the digital payment ecosystem ‘sustainable’. This entire system of UPI, which works in real-time 24 hours a day, has a very large and expensive infrastructure behind it. This includes servers, technology, security systems and participation of many banks.
When you do UPI from a bank account, the costs are less. But when payment is made through credit card, it also involves the credit card network (like RuPay) and the issuing bank. This nominal fee has been imposed on merchants to cover the cost of the entire process and to ensure that the system continues to run smoothly in the future. NPCI aims to maintain this digital infrastructure strong without burdening customers.