RBI approves expanding UPI transactions to allow credit payments

Announcements
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Great news for UPIšŸ“² users. The RBIā€™s latest decision will let you use your phone like a credit card. How? Read on

1.:bank:RBI has okayed a proposal that will allow individuals to pay via UPI using pre-approved credit lines from banks. What is that?

  1. Banks can now offer credit card-like products that work on the UPI platform.

  2. Up until now, you could only pay via UPI if you had money in the bank.

  3. With this change, you can transact via UPI on credit. Just like you use a credit card.

  4. Now, banks will be able to offer loans over the phone, similar to credit cards but without issuing a physical card.

6.:thinking:You might ask: whatā€™s in it for the banks? The move can boost lending and help customers access money quickly, especially in times of emergency. It can also encourage more people to use UPI for financial transactions. Also, reduced expenses like issuing of cards or deploying swipe machines.

  1. :mag:Experts believe that the step will further enhance the flexibility of financial transactions and will pave the way for the further growth of UPI.

  2. :chart_with_upwards_trend: ICYDK, UPI accounts for 75% of retail digital payments in India. In terms of volume, the number of UPI transactions crossed 850 crore in March 2023, a jump of over 60% year-on-year.