No charge for RuPay credit card use on UPI for transactions up to Rs 2,000: NPCI

Charge-free UPI transactions through RuPay credit cards

RuPay credit cardholders

India’s answer to international payment networks like Visa and MasterCard, RuPay, was launched by the National Payments Corporation of India (NPCI). It is an indigenous payment facilitator that offers both debit and credit cards.

Ever since its inception, the Reserve Bank of India (RBI) has been promoting RuPay cards. Currently, almost all major banks offer RuPay credit and debit cards to their customers. Moreover, RBI recently removed the charges from RuPay credit card transactions via UPI to make the card more attractive.

Related – Find out how to get a RuPay credit card and its benefits

What has changed?

According to the latest circular issued by the NPCI, RuPay credit cards would not attract any charge when used for UPI transactions up to a limit of Rs.2000.

Before the circular was issued, UPI transactions were linked through debit cards to a customer’s savings or current accounts. While credit cards could be linked, an additional charge was levied on UPI payments through credit cards. This charge was called the MDR, which was expressed as a percentage of the transaction amount.

As per the latest circular, the MDR has been waived off for transactions up to Rs.2000 on RuPay credit cards.

What is the MDR?

MDR stands for Merchant Discount Rate. It is the charge merchants pay to banks when accepting payments from their customers. Every time the customer uses a credit or debit card to pay the merchant, the merchant pays a percentage of the transaction amount as MDR to the bank.

How can customers use the no-charge benefit?

NPCI stated in the circular how customers could use the no-charge benefit to their advantage. To make use of the benefit, customers would have to onboard their credit card on the UPI app. During the onboarding process, when the customer sets a UPI PIN, it is assumed that the customer is allowing the app to use his credit card for all UPI transactions. Even for international transactions, the existing process of card usage would apply.

Thereafter, whenever customers make UPI transactions linked to their RuPay credit cards, and the value of the transaction is up to Rs.2000, they would incur nil MDR.

The benefit of using RuPay credit cards for UPI transactions

The obvious absence of charges makes RuPay credit cards more attractive to consumers. Besides that, no charge would also allow the customer to get a wider choice of payment for their UPI transactions.

Customers would also get transparent information about the UPI transactions made through their credit cards and the charges incurred on them. The credit card would also send regular updates to cardholders about their transactions in each billing cycle.

Lastly, the absence of charges would promote the usage of RuPay credit cards and make them acceptable to almost all merchants.

So, if you own a RuPay credit card, link it with your UPI account and enjoy seamless and charge-free transactions every time you use the credit card.

Related – Find out how RuPay is different from Visa or MasterCard


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