Last Updated:July 08, 2025, 17:30 IST
Using the savings in your bank account for UPI transactions is a common practice, but customers can now also pay merchants using a credit card on digital transfers.
How to use your credit cards to earn rewards on UPI transactions.
Unified Payments Interface or UPI has become the preferred mode of digital online payments for Indians. Whether it is your regular food accessories, travel or major expenses, the UPI helps you make the quickest and safest transactions using a mobile phone. While using the savings in your debit bank account for UPI transactions is a common exercise, Indian citizens can now also link their credit cards to these online payments.
According to an announcement dated 2022 by the Reserve Bank of India (RBI), UPI users can link their RuPay credit cards to make the same transactions, while also earning regular cashback and gifts. Since then, various banks have introduced their versions of credit cards that ease the UPI transaction process to maximise their customer base. Some of whom even offer customers 3-5 per cent cashback on credit card-based UPI transactions.
While the UPI credit card allows users to make their UPI payments using a credit card instead of a bank account, these payments are restricted to customer-to-merchant (C2M) transactions only and do not apply to peer-to-peer (P2P) transfers. This restriction may be annoying to users trying to make transfers to their family and friends, but it also proves helpful in preventing users from misusing their credit cards.
Regular UPI users would’ve noticed that the credit card option doesn’t appear on the mobile application you use for payments when attempting to pay a UPI ID or scan a QR code linked to a personal account rather than a merchant. Credit card-based UPI transactions can be made to a grocery store owner via their business UPI QR, not while sending money to your family member or as rent to your landlord. Thus, the UPI rewards on a credit card transaction only apply to customer-to-merchant payments for users.
However, not all merchants accept UPI credit card transactions due to the merchant discount rate (MDR), which is a fee that businesses must pay to banks or card networks for processing payments through credit cards. Despite this, UPI transactions through credit cards have become a preferred mode of UPI payments by customers as it buys them time to repay the sums later on using their bank accounts while enjoying the rewards provided by various banks and merchants.
Some banks have exclusively launched their credit cards to promote UPI transactions while enticing customers through rewards. These include HDFC Tata Neu, Yes Bank Klick, Axis Bank Supermoney and Jupiter Edge CSB among others. Axis Supermoney card and Yes Bank Klick even offer rewards of 3 per cent and 5 per cent, respectively, when used on the Kiwi app. The Axis Supermoney card also rewards 3 per cent cashback on all scan and pay UPI payments done on the Supermoney application.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
- Location :
Delhi, India, India
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#UPI #Payments #Credit #Cards #Heres #Business #News
