In this era of digital transactions, everyone prefers to make payments through Unified Payment Interface (UPI) instead of cash. UPI payments are made in a few seconds through Google Pay, Paytm, PhonePe, and BHIM apps! Your UPI ID is linked to your bank account, and when you make a payment, the balance is deducted from your account. But now NPCI has come up with such a great service that UPI payments will be possible even if there is no money in your account. So, what is this ‘Credit Line on UPI’ and how will it work? Let’s know in detail.
Now, UPI payment will be possible even with zero balance
Many times it happens that our payment gets declined if there is less balance in the bank account, or there is no balance at all! Because of this, we often have to face embarrassment at the shop. But now you will be able to make UPI payments from your mobile phone even when there is no money in your account, i.e., there will be 0 balance. National Payment Corporation of India’s (NPCI) new ‘Credit Line on UPI’ service will do this wonder.
Like a digital credit card, make payments with approved loans
The National Payment Corporation of India (NPCI) is offering a service to link credit lines with the Unified Payment Interface (UPI), called ‘Credit Line on UPI’. The ‘Credit Line on UPI’ service was announced in April 2023. This is a kind of digital credit card, which works like a pre-approved loan. That is, now you will not need to have money in your bank account immediately to make payments.
The limit will be available like a credit card
In ‘Credit Line on UPI’, just like a credit card, the customer will be given a limit of a certain amount to spend. For this, you have to apply to the bank where you already have an account. This account should be linked to your UPI ID. After getting approval from the bank, you will be able to make payments through UPI, whether you have money in your account or not. This service can prove to be very beneficial for those who suddenly need money.
When will you have to pay the money
The bank will charge interest on the amount spent by you. You will get 45 days to pay the money. During this time, the bank will not charge any interest. If you do not make the payment within 45 days, the bank will charge interest. This service is currently live with some government and private sector banks. You will also get this service in BHIM, Paytm, PayZapp, and G Pay. So, now you can use UPI without any worry.
What will be the benefit to the customers
The credit line service is very useful in an emergency. With this, customers will not need to keep different cards. You will be able to make payments through UPI from your mobile itself. This will save you time. Because it takes some time to make a credit card, whereas the credit line will be available immediately after approval. This will make the point-of-purchase credit experience seamless. That is, it will become even easier to make payments while shopping.
When was UPI launched
With the launch of UPI in 2016, there was a revolution in the world of digital payments. UPI provided the facility to transfer money directly to the bank account! Earlier, digital wallets were in the trend. There were hassles like KYC in wallets, whereas in UPI, there is no such thing to be done. UPI made digital payments even more accessible to the common man.
Fund transfer in real time
The UPI system transfers funds in real time! Multiple bank accounts can be linked in a single application. UPI has been developed on the model of IMPS. Therefore, you can do 24×7 banking through the UPI app. To send money to someone, you only need their mobile number, account number, or UPI ID. OTP, CVV code, card number, and expiry date are not required to do online shopping with UPI. Not only money but also utility bill payment, online shopping, and shopping can be done with UPI. It is truly a versatile payment system.
How does UPI work
For the UPI service, you have to create a virtual payment address. After this, it has to be linked to the bank account. Once this is done, you do not need to remember the bank account number, bank name, or IFSC code. The payer only processes the payment request according to your mobile number. This process is extremely simple and secure.
Who regulates it
In India, the RTGS and NEFT payment systems are operated by the Reserve Bank of India (RBI). Systems like IMPS, RuPay, UPI are operated by the National Payment Corporation of India (NPCI). Together, these two organizations keep the country’s digital payment system safe and efficient.
In which countries does India’s UPI work
India’s UPI now works in UAE, Sri Lanka, France, Bhutan, Nepal, Singapore, Mauritius, Trinidad and Tobago! Russia has signed an agreement in this regard. While talks are still going on in Indonesia, Latin America and Africa. Soon the scope of UPI may increase even more, which will make digital payments easier even at the international level.