Credit Cards to be Linked with UPI

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UPI which stands for Unified Payments Interface has been an integral part of India ever since it launched. It has a lot of advantages to it and merchants as well as people are more inclined towards using UPI rather than Cards. With its reach of over 25 Crores Individual users as well as 5 Crore Merchants UPI is in the perfect position for the next big thing and I feel like they are on the Verge of delivering it Big.

Recently the Reserve Bank of India announced that they will be launching the feature of Linking your Credit Card with UPI which obviously will make things a lot more convenient for the users and that could open up a lot of doors for us but there can be also some issues.

The main issue I see here is the whole MDR issue. MDR stands for Merchant Discount Rates which is the fees that MasterCard or VISA charges a fees for the whole processing of the transaction and that is kind of justified in a sense but now that Credit Cards will be linked to UPI which is basically Zero Fees what's going to happen to the MDR fees is something that really concerns me.

Up till now the Government of India was paying the MDR fees for the Debit Card linkage with UPI but the average amount of Money spent by a Debit Card is shockingly low in comparison to the amount of money spent each month on an average by Credit Cards. So yeah things are going to be dicey, but I really want the RBI to succeed in this feat as it's something worth striving for.

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