Credit card linkage to UPI: Uncertainty over pricing leaves players in dark

Reserve Bank of India allow RuPay credit cards to link with Unified Payments Interface (UPI) which created a positive decision for the industry as it is expected to open up a big payment universe, an uncertainty over the pricing structure has left players seeking clarity on how such a move will be implemented. Vishwas Patel, chairman, Payments Council of India (PCI), hailed the RBI’s move and emphasized that the players need more clarity on the same because in giving credit, there is a cost of funds involved for issuing banks, while in UPI transactions, the MDR is zero. There are lots of questions and a whole lot of clarity required. Whether it is a credit card, debit card, or UPI, the consumer doesn’t incur any charge, it is the merchant who bears the cost in terms of Merchant Discount Rate (MDR). While there is no MDR on UPI, for debit cards there is no cap on MDR for credit cards. Rupay debit cards have no MDR whereas Rupay credit cards typically have lower MDRs vs those on Visa/Mastercard. The RBI has not specified the pricing part yet.