In an era of rapid technological advancements, the Unified Payment Interface (UPI) has stood out as a game-changer in the world of digital payments. This payment method has not only gained immense popularity but also continues to evolve with innovative features.
One such groundbreaking addition is the introduction of “UPI Credit” or “Credit Line on UPI.” In April 2023, the Reserve Bank of India (RBI) proposed an expansion of the UPI system, including the integration of pre-sanctioned credit lines issued by banks.
Fast forward to September 6, 2023, this proposal became a reality with the launch of the ‘Credit Line on UPI’ feature at the Global Fintech Fest.
The Rise of UPI
Unified Payment Interface (UPI) has taken the Indian payment landscape by storm, becoming the go-to choice for transactions ranging from everyday purchases at the local vegetable shop to grand shopping sprees at malls.
Its versatility and ease of use have made it a household name. To further enhance its utility, new features are continually being integrated.
Just last year, the ability to link Rupay Credit Cards to the UPI app was introduced, expanding its scope. However, the latest development takes it a step further.
It allows users to make UPI payments even if their bank accounts lack sufficient funds or if they don’t possess a Rupay credit card.
This is made possible through a pre-approved credit line issued by select banks, with the repayment to be made to the bank at a later date.
Currently, this feature, known as UPI Credit, is live on the BHIM app, operated by the National Payment Corporation of India (NPCI).
Understanding UPI Credit
To put it simply, UPI Credit or Credit Line on UPI allows you to make UPI payments using a credit limit extended by your bank, even if your account balance is low or you don’t have a Rupay credit card.
Subsequently, a bill will be generated for the amount spent, which you will need to repay to the bank. Presently, six prominent banks, including Axis Bank, HDFC Bank, ICICI Bank, Paytm Payments Bank, PNB, and SBI, offer UPI credit on the BHIM app.
To activate this service, if you have been issued credit by one of these banks, you can navigate to the BHIM app’s profile section, select UPI Credit, and choose the respective bank.
Just like when you link a bank account or Rupay credit card to the UPI app, you’ll be required to create a unique UPI PIN for this service.
RBI’s Vision for UPI
The inception of the UPI payment system dates back to 2016, and it has since been managed by the National Payments Corporation of India (NPCI).
UPI has revolutionized real-time payments, simplifying money transfers by utilizing only the recipient’s mobile number, account number, UPI ID, or UPI QR code.
The UPI app operates round the clock, enabling 24×7 banking activities. Interestingly, online shopping through UPI does not demand conventional information like OTPs, CVV codes, card numbers, or expiry dates.
Conclusion
The introduction of the ‘Credit Line on UPI’ feature marks a significant milestone in the evolution of digital payments in India. It makes UPI even more accessible and convenient, ensuring that users can make transactions without worrying about the balance in their accounts or the absence of a Rupay credit card.
As technology continues to shape the future of finance, innovations like UPI Credit showcase the adaptability and versatility of digital payment systems.
For more information on how to access UPI Credit and make the most of this exciting feature, explore the BHIM app today.
FAQs
What is UPI Credit, and how does it work?
UPI Credit, also known as Credit Line on UPI, allows users to make UPI payments even if they don’t have sufficient funds in their bank accounts. They can spend from a pre-approved credit line issued by select banks and repay the amount later.
Which banks offer UPI Credit on the BHIM app?
Currently, six banks offer UPI Credit on the BHIM app: Axis Bank, HDFC Bank, ICICI Bank, Paytm Payments Bank, PNB, and SBI.
How do I activate UPI Credit on the BHIM app?
To activate UPI Credit, go to the BHIM app’s profile section, select UPI Credit, and choose the bank that has issued you the credit. You’ll need to create a UPI PIN for this service.
When was the UPI payment system introduced in India?
The UPI payment system was launched in India in the year 2016.
What makes UPI a convenient payment method for online shopping?
UPI simplifies online shopping by eliminating the need for OTPs, CVV codes, card numbers, and expiry dates. Transactions can be made using just the recipient’s mobile number, account number, UPI ID, or UPI QR code.
For any further queries or assistance, visit the BHIM app or contact your respective bank.