RBI launches RuPay Credit Card on UPI, UPI Lite and Bharat Billpay, a Cross Border Bill Payment System

Digital Payments

At the Global Fintech Fest 2022 on Tuesday, RBI Governor Shaktikanta Das unveiled three significant digital payment initiatives (September 20).

RuPay credit card on the unified payments interface (UPI) network, low-value transaction targeted solution UPI LITE, and Bharat BillPay Cross-Border Bill Payments were some of the products that were launched.

“In collaboration with the stakeholders, three exciting new products are being launched…Two of these pertain to enhancing the feature set of UPI by facilitating small value transactions through UPI LITE and linking credit cards to UPI. The third initiative is the enablement of cross-border inward bill payments using Bharat Bill Payment System (BBPS),” said RBI Governor.

The services were introduced in the presence of several people, including Biswamohan Mahapatra, chairman of the NPCI, and Nandan Nilekani, chairman of Infosys and NPCI advisor.

The three initiatives can ‘revolutionise the digital payments ecosystem, extend the reach of digital payments and aid the journey of onboarding the next 300 Mn users on digital payments,’ according to a news release from NPCI.

Authorities will now permit the linking of RuPay credit cards with UPI as a result of the statement. Only debit cards could previously be linked to the UPI.

The product will initially only be available to Punjab National Bank, Union Bank of India, and Indian Bank clients. Extraction of “actionable learnings” from the operations will be the main focus of the first phase. The idea will then be expanded to include additional banks and to boost usage.

According to the NPCI, to facilitate safe and secure payment transactions, the RuPay credit card will be linked to a virtual payment address, in this case, the UPI ID.

The UPI LITE service, which will primarily target low-value transactions, was also introduced by the governor of the RBI. Users who have UPI LITE activated on their BHIM apps can conduct little transactions up to INR 200 in what is known as a “near-offline mode.”

“UPI Lite will reduce the debit load on the core banking system, thereby improving the success rate of transactions further, enhancing the user experience, and taking us one step closer to processing a billion transactions a day on the UPI platform,” said the NPCI.

Additionally, a digital wallet’s total UPI Lite balance is now limited to INR 2,000. Eight banks currently offer the service, including Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India, and Utkarsh Small Finance Bank.

The fact that most transactions completed on the UPI are low-value transactions may be the basis for the 200 INR limit. Currently, less than INR 200 is used in about 50% of UPI transactions that are processed on the UPI network.

The RBI Governor also announced the expansive Bharat BillPay Cross-Border Bill Payments system during the ceremony. The tool, which is primarily aimed at non-resident Indians (NRIs) and Indians residing abroad, enables users to settle bills for utilities, water, and telephones on behalf of their relatives in India.

Federal Bank is the first company to launch the Bharat BillPay Cross-Border Bill Payments and has partnered with UAE’s Lulu Exchange to offer the service.

The move is likely to increase remittances and address service gaps for Indians who pay their utility bills from outside.

It is important to remember that the cross-border inbound payments system was unveiled by the RBI last week. The system, which handles more than 8 Cr transactions each month, has onboarded more than 20,000 billers thus far.

The RBI published its “Payments Vision 2025” earlier in June of this year to enhance the nation’s digital payments ecosystem. Several measures to expand the area have been launched by the RBI and other government organisations as part of the move.

In March, the central bank announced the UPI123Pay feature, which enables users of smartphones without the internet to conduct UPI transactions.

Along with that, the central bank has also disclosed several other efforts, including tokenization, the establishment of a regulatory sandbox, and the opening of access to centralised payment systems for non-bank payment system operators.

As if that weren’t enough, the RBI has also supported initiatives to expand domestic payment systems internationally, as well as efforts to create a framework for regulating payment aggregators and a framework for PSOs to outsource payment- and settlement-related services.

The efforts were successful. For the adoption of UPI and RuPay Cards in France, NCPI International and Lyra Network signed a memorandum of understanding in June.

As far as innovation goes, UPI is still a pioneer. It processed 10.72 lakh crore worth of transactions in the same period, or 657 crore transactions, in the previous month.

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