How can you make UPI payments without sufficient bank balance and repay later? Know here

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Now, RuPay credit card holders from various banks can utilize Google Pay for UPI transactions. This means users can make UPI payments by scanning the merchant’s QR code, even in offline mode. India witnessed a substantial share of global digital transactions in 2021, primarily due to the convenience and universality of UPI, enabling cashless transactions via smartphones linked to bank accounts.

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UPI transactions are possible through credit and debit cards using QR code scanning or single-click app transfers. Interestingly even with a low bank balance you can make UPI payments.

The Reserve Bank of India (RBI) has recently allowed banks to offer a credit line feature to UPI users. This allows users to spend from a pre-approved credit line and settle payments with the bank later. In the RBI’s notification on September 4, they outlined this facility, stating that transactions via a pre-approved credit line offered by scheduled commercial banks to individuals are now enabled for UPI transactions with the individual’s prior consent. But how does it function?

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To utilize this feature, users can use UPI applications like Google Pay, Paytm, MobiKwik, or mobile banking UPI apps, depending on the bank’s website. Initially, banks must obtain the customer’s consent to establish a credit line with a specific limit. Once approved, users can spend the predetermined amount via the UPI app and repay it before the due date.

While some banks may charge interest on the credit line, others offer a credit-free period. During this period, there’s no interest on the utilized amount if repaid on time.

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Among the prominent banks, HDFC Bank and ICICI Bank have already introduced their credit lines – HDFC UPI Now Pay Later and ICICI PayLater. HDFC charges a fee of Rs 149 for activating the service, while ICICI Bank doesn’t impose an activation fee. However, a service charge applies if users exceed the bank’s set limit. Both banks have set a credit limit of Rs 50,000 with specific eligibility criteria.