Can Making UPI payments using credit cards derail your financial discipline?
Customers can use a product or service now and pay for it later with credit cards because they operate on a deferred payment model. Users who prefer UPI over swiping their debit and credit cards will gain an additional advantage by linking their credit cards to the UPI. To get a balanced perspective on the benefits and drawbacks of the linkage, CNBC TV18 speaks with a few experts.
A few moneylenders the nation over have connected their Rupay charge card to the Unified Payments Interface (UPI) network. By taking advantage of the adaptability that UPI provides, it is anticipated that this move will make it easier for customers to use credit.
Although this may appear to be a game-changer for the digital payment system, the most important question is whether it will encourage users to spend more and interfere with their financial discipline.
Let's begin by deciphering the concept behind credit cards and UPI. Credit cards operate on a deferred payment basis, allowing customers to use a product or service now and pay for it later.
Users who prefer UPI over swiping their debit and credit cards will gain an additional advantage by linking their credit cards to the UPI.
A wider range of transactions can now be paid for with credit cards. The same can be accomplished by linking the card information between various UPI apps.
“Credit card holders will be able to participate in the UPI QR ecosystem created by offline payment players like PhonePe, G-Pay, and others if credit cards are linked to UPI apps. Mehul Mistry, Global Head, Strategy, Digital Financial Services & Partnerships, Wibmo, a PayU company, told CNBC-TV18.com, "to make payments to small merchants that are quick, secure, and convenient, along with the benefits of credit cards, including rewards."
The advantages Mistry believes that credit card integration with UPI can be a powerful consumer tool. While it is significant to keep up with monetary discipline, the wise utilization of connecting Mastercards on UPI can turn into an extremely strong little ticket credit suggestion for shoppers.
Adhil Shetty, CEO of BankBazaar.com, shares these sentiments and is of the opinion that this idea can be more rewarding for customers as long as they practice financial discipline.
Shetty stated to CNBC-TV18.com, "They can set shopping and spending limits and ensure they do not go overboard with their spends while enjoying savings via discounts and rewards."
What's more, clients can acquire a superior comprehension of their ways of managing money and exercise more prominent command over their funds.
The achievability
Specialists say utilizing UPI on Visas dependably implies exploiting the advantages they offer and supporting great monetary propensities that will prompt long haul monetary prosperity.
Conversing with CNBC-TV18.com. MobiKwik's Co-Founder and CEO, Bipin Preet Singh, stated that integrating UPI and credit cards does not fundamentally alter the principles of responsible financial management.
"By observing exchanges, making timely payments, and being aware of one's ways of managing money, people can use charge cards on UPI for their potential benefit while maintaining great monetary practices. And there are numerous benefits.
Users of UPI had limited payment options because they could only link their savings or current accounts. "Now, people can easily use their credit limit to make UPI transactions by leveraging the power of their credit cards," Singh stated.
Notably, in this scenario, users are not required to carry physical cards, swipe, tap, or wait for OTPs. Additionally, using credit cards through UPI saves time and eliminates the dangers of using a physical card, such as skimming or card loss.
