Razorpay becomes India’s First Payment Gateway to Support Credit Cards on UPI, Increasing Credit Adoption in India

Razorpay, India’s top full-stack payments and banking platform for businesses, just made another industry-first step. The platform declared that it is prepared to accept credit card transactions on the Unified Payments Interface to further improve digital payments and increase credit penetration in India (UPI).

Thanks to this development, Razorpay is now the first PG in India to support credit cards through UPI. The first people to profit from this innovation today will be customers of Indian Bank, Union Bank, Punjab National Bank, and HDFC Bank.

The Reserve Bank of India (RBI) and the National Payments Corporation of India’s (NPCI) most recent digital invention is this product (NPCI). RuPay credit cards are now supported on UPI, allowing Razorpay firms to start accepting credit card payments there with only a few minor tweaks to their present setup. Due to a partnership with Axis Bank, which shares Razorpay’s dedication to fulfilling the constantly shifting needs of merchants and enhancing convenience, this disruption is made feasible.

Customers may currently use their bank accounts to complete transactions utilising UPI. Due to the integration of credit cards and UPI, customers won’t always need to carry their credit cards with them to make purchases. One or more credit cards are held by the almost 50 million UPI users in India who utilise the service on a regular basis. The financial regulator will provide clients the best of both worlds with this choice: a seamless UPI payment experience together with the benefits of short-term credit and card rewards.

“India is one of the very few nations that have been able to stimulate innovation via directed legislation,” stated Shashank Kumar, MD, and Co-Founder of Razorpay. We have always flourished as the dominant player in this ecosystem by quickly bringing cutting-edge solutions to market that would transform opportunities into exponential effects for our merchants and the nation.

The NPCI and RBI’s decision to allow credit card transactions and payment acceptance on UPI are expected to have favorable effects on consumers and businesses. Any payment gateway infrastructure must be ready for this to have an impact. Razorpay has made the first move toward democratizing credit card transactions on UPI for our businesses in this area.

“We are thrilled to join with Razorpay to quickly enable Credit Card payments over UPI on their huge merchant base, complimenting NPCI’s objective of helping all RuPay Credit Card users,” said Nalin Bansal, Chief of Corporate and Fintech Relationships and Key Initiatives, NPCI. This would enable customers to conduct simple transactions with businesses all over the country via UPI, in line with the government’s plan to build India’s structured credit infrastructure.

Go-to-market will be accelerated by the active engagement of a key ecosystem partner like Razorpay, which will allow credit cardholders to conduct transactions using UPI and do away with the need to carry physical cards. As we work to increase India’s credit penetration while expanding our service offering, this development is crucial to the ecosystem.

“We have been consistently working on innovation-led collaboration models to provide our merchants with a value proposition particularly geared to adapt to their evolving demands while offering increased convenience,” said Sanjeev Moghe, President & Head – Cards & Payments, at Axis Bank. A step in that direction is our partnership with Razorpay, which enables merchants to accept credit card payments over UPI. In the next two to three years, we think this might revolutionize how customers make payments.

Vice President of Zomato, Pradyot Ghate stated, “At Zomato, we’re constantly exploring innovative technologies that improve the experience for our clients. This invention attracted our attention since it merged the convenience of UPI with the security of credit cards, which we all like. We’re thrilled to collaborate with Razorpay, the first payment gateway to use this breakthrough, on this project.

Although the credit card market has grown consistently at a pace of 30% over the previous three years, according to data from the RBI, just 6% of Indians now have access to a credit card. On the other hand, UPI, which is utilized by more than 40% of Indians, recorded over 731 crore transactions in October 2022 alone.

Businesses and merchants must have access to a hassle-free, frictionless experience given India’s rapid use of digital payments for transaction demands. With its innovation-first strategy, Razorpay has responded to the changing regulatory environment. As a result, the business is now a platform that makes banking and payments for businesses simpler. This has allowed the company to address the payment complications that merchants encounter.

The Indian market for digital payments and more UPI information

 Customers may now execute UPI transactions using their bank accounts. With the linking of credit cards with UPI, consumers won’t always need to have their credit cards on them in order to make transactions after this announcement. According to data from Razorpay’s press release, roughly 250 million Indians use UPI for daily transactions, and nearly 50 million of those people own one or more credit cards. The financial regulator’s initiative aims to give customers access to UPI payments as well as the advantages of short-term credit as well as card rewards.

Representatives of Razorpay claim that India is one of the only nations that has been successful in fostering innovation via the application of directed legislation. As a result, the company has been working to develop products that will help turn opportunities into rapid growth for both its merchants and the nation. The decision made by the NPCI and RBI, according to the firm, would benefit consumers and businesses by enabling them to accept credit card payments on UPI and conduct transactions there. Razorpay made the first decision to democratize credit card transactions on UPI for their merchant client base knowing that for the enabling to be effective, payment gateway infrastructures needed to be available.

According to NPCI representatives, by working with Razorpay, they enable credit card payments to be accepted through UPI, allowing customers to deal with businesses throughout India using credit rails in keeping with the government’s goal of developing the region’s structured credit infrastructure.

The institution thinks that having active engagement from a partner like Razorpay will speed up go-to-market by allowing credit cards to conduct these sorts of transactions and obviating the requirement for a physical card. The company wants to increase credit penetration in India while also expanding its suite of services, so the development is also seen as being of crucial importance to the ecosystem.

6% of Indians have access to a credit card, compared to more than 40% of Indians who use UPI, according to data from the RBI quoted by the Press Trust of India. However, penetration rates are still low.

Indian companies and merchants require access to a smooth experience because the country has adopted digital payments for its transaction demands. With this information as its foundation, Razorpay has modified its innovation-first approach to the changing regulatory environment to overcome the challenges that merchants encounter while accepting payments. The platform aims to make banking and payments for companies simpler.

Razorpay will let businesses to accept credit card payments using UPI.

Fintech platform Razorpay unveiled an industry-first initiative on Monday to enable businesses to accept credit card transactions via universal payments interface as the digital payments sector undergoes extraordinary growth (UPI). Now that RuPay credit cards are supported on UPI, Razorpay businesses may begin accepting credit card payments without changing their present configuration.

The company claims that this action is made possible by a collaboration with Axis bank, which has a focus on providing better ease and satisfying the continuously changing demands of merchants. The company claims that this product is in line with the most recent technological advancements made by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI). On October 4, the NPCI granted approval for the BHIM UPI app to accept credit cards from RuPay.

For our merchants, Razorpay has taken the first step toward democratising credit card transactions on UPI, according to Shashank Kumar, MD and Co-Founder of Razorpay, “For this enablement to bring in the effect, the preparedness of any payment gateway infrastructure is required.” Nearly 50 million UPI users in India who use the service on a daily basis hold one or more credit cards.

According to the company, HDFC Bank, Punjab National Bank, Union Bank, and Indian Bank customers would be the first to benefit from this innovation. “This will enable customers to trade seamlessly with merchants throughout India on credit rails in accordance with the government’s mission to establish the structured credit infrastructure in India,” says Nalin Bansal, Chief of Corporate and Fintech Relationships and Key Initiatives, NPCI.

According to information from the RBI, the country’s credit card business has consistently expanded at a pace of 30% over the last three years. “We think this initiative has the potential to revolutionize how consumers make payments in the next 2-3 years, says Sanjeev Moghe, President and Head – Cards & Payments, Axis Bank.

edited and proofread by nikita sharma