What Businesses Need to Know About Accepting Credit on UPI

India’s way of paying has changed a lot over the past few years. Cash used to be king, then came UPI, making it super simple for people to pay directly from their bank accounts with just their phones.

Now, another big change is happening: people can start using their credit cards on UPI. This is called credit on UPI. For businesses, this could be a big opportunity-but it’s important to know how it works and what it might mean for you.

Let’s take a closer look, in simple terms.

What Is Credit on UPI?

Until now, UPI was like paying cash straight from your bank account. When someone paid you through UPI, the money came directly from their savings or current account.

With credit on UPI, things work a little differently. People can link their credit cards to their UPI apps (like Google Pay, PhonePe, Paytm, etc.). When they pay you, the amount goes onto their credit card bill instead of being taken out of their bank account right away.

In other words, it’s like someone using a credit card machine-but they’re doing it through UPI instead.

Why does this matter?

• Customers can buy things even if they don’t have cash in their account at the moment.
• They can pay later, giving them more flexibility.
• Many people love earning rewards, cashback, or points on their credit cards-and now they can get those benefits while paying through UPI.

How This Helps Your Business

Accepting credit on UPI can be very useful for businesses of all sizes. Here’s why:

1. People Spend More When Paying on Credit

Most customers tend to buy more expensive things when they’re using credit because they don’t have to pay immediately.

For example, someone might hesitate to buy a product costing ₹5,000 if the money has to leave their bank account today. But if they can pay with credit and settle the bill later, they might go ahead with the purchase. This can help your business earn more.

2. Giving Customers More Choice

Today’s customers love having different payment options. Some prefer cash, some like debit cards, and some like credit cards.

If you allow people to pay with credit on UPI, you’re giving them one more convenient way to shop with you. It makes your business look modern and customer-friendly.

3. Fast Payments for You

Even though customers are paying with credit, UPI keeps things moving quickly. You usually get your money fast, much like other UPI payments.

This is great for your cash flow because you don’t have to wait long for the money to reach your account.

4. Simple and Easy for Customers

Paying with credit on UPI is easy for your customers. They don’t have to take out their credit card, swipe it, or type in long numbers.

They just scan your QR code or click a few buttons on their UPI app. It’s fast, simple, and feels just like making a normal UPI payment.

Are There Any Extra Costs?

One thing to keep in mind is the fees you might pay when customers use credit on UPI.

• Normal UPI payments (using bank accounts) are usually free or very cheap for businesses.
• Credit card payments, even on UPI, usually have a small fee called an MDR (Merchant Discount Rate).

This means that for every payment, you pay a small percentage to the bank or payment company. It’s similar to the fees you pay when someone uses a credit card machine.

Before you start accepting credit on UPI, it’s wise to:

• Check what fees your payment service provider charges.
• Compare rates from different providers.
• Make sure the fees fit into your business’s profit margins.

How to Start Accepting Credit on UPI

If you already take UPI payments, you might not need to do much to start accepting credit on UPI.

Here’s what you can do:

• Talk to your bank or payment service provider to ask if they support credit on UPI.
• See if you need to update your UPI QR code.
• Make sure your staff knows how to explain credit on UPI to customers.

For online businesses, check with your payment gateway to see if you need any technical updates on your website or app.

Tell Your Customers About It

Many people don’t yet know they can pay with their credit cards through UPI. It’s still new for a lot of users.

It’s a good idea to:

• Put up signs in your store saying you accept credit on UPI.
• Let customers know they can earn their usual credit card rewards or cashback.
• Share the news on social media, WhatsApp, or through your online store’s banners.

The more customers know, the more likely they’ll choose to use this new way to pay.

Keep an Eye on Rules and Changes

Credit on UPI is still quite new. It started with Rupay credit cards, and now other cards like Visa and Mastercard are getting added.

The RBI and NPCI might keep updating the rules, especially about fees or which cards can be used. So keep checking for updates from your bank, payment provider, or official government announcements.

Should Your Business Accept Credit on UPI?

If you sell products or services that cost a bit more, accepting credit on UPI could be a smart move. Customers love flexibility and convenience, and this new option might help you stand out from competitors.

Just remember to check the fees and see if it fits into your business plans.

In Short

• Credit on UPI is the next step in India’s digital payments journey.
• It lets people pay you through UPI, but using their credit card instead of their bank account.
• Businesses might see higher sales, happier customers, and faster payments.
• Watch out for any extra fees, and keep an eye on new rules from the RBI or NPCI.

Digital payments in India keep changing. Staying up to date-and offering your customers the latest options-could help your business grow.