Linking RuPay credit cards with UPI a game-changer, but pain points remain

It could well be argued that had UPI been profitable for banks, they may have been able to settle for a lower MDR on RuPay credit cards

Come September, and millions will be able to buy whatever they’ve set their hearts on and pay through RuPay credit cards linked to the Unified Payments Interface (UPI).

The merchant discount rate (MDR) has been set at 2 per cent of the transaction size, of which 1.5 per cent will go as interchange towards the card-issuing bank, with the rest (50 basis points) being shared as fees with RuPay and the acquiring entities — be it banks, or non-banks like Mswipe Technologies and Paytm.

It will lead to exponential growth in RuPay credit-card issuances, but a raft of issues may need to