UPI Now Pay Later: Has it ever happened to you that you’re shopping and your UPI payment fails due to a low bank balance? To avoid such embarrassment, NPCI has launched a revolutionary feature called ‘UPI Now Pay Later’ or ‘Pre-approved Credit Line on UPI’. Now, your UPI will no longer be limited to your bank balance.
Even if you don’t have any money in your account, you can make payments instantly using the credit limit provided by your bank. This feature is set to be a major game-changer in the world of digital payments, eliminating the hassle of credit cards and offering credit directly in your mobile app.
What is UPI Now Pay Later
Simply put, UPI Now Pay Later is a digital credit service where banks provide their customers with a fixed credit limit based on their profile and transaction history. Until now, it was mandatory to have funds in your savings account to use UPI.
However, with this new feature, you can make instant payments using your bank’s credit line and return the funds after a certain period of time. It works just like a credit card, but you don’t need to have a physical card. This is ideal for those times when your salary is exhausted at the end of the month, but important expenses are pending.
How does this feature work
To avail this feature, the bank first checks your credit history and CIBIL score. If your banking record is good, the bank activates a limit of ₹20,000 to ₹50,000 or more in your app. When you scan a QR code to make a payment to a merchant, the app will show you your bank account and a ‘Credit Line’ option.
Once you select a credit line, the payment is processed instantly, and the amount is deducted from your limit. At the end of the month or billing cycle, you’ll receive a bill that you can repay according to the agreed terms. This entire process happens in real-time and requires no paperwork.
The Amazing Benefits of a UPI Credit Line
This feature not only enhances convenience but also acts as a powerful shield in case of financial emergencies. Its biggest advantage is that a low bank balance will no longer hinder your purchases or payment of important bills. This feature works even where regular credit cards are not accepted because it can be used with any UPI QR code.
This completely digital process ensures easy and fast onboarding. Furthermore, paying your bills on time improves your credit score, making it easier to obtain larger loans in the future. This is a flexible payment option that gives you the freedom to spend now and pay later.
Who can avail this facility
NPCI has set certain criteria for this feature, which must be met. The first requirement is that the applicant must be an Indian citizen and at least 18 years of age. Documentation requires an Aadhaar card and a PAN card linked to an active mobile number.
You must also have an account with a bank that is UPI-enabled and offers a credit line. Most importantly, your CIBIL score must be 750 or higher to avail this facility. Banks approve this credit limit based on your repayment capacity and past transactions.