The Reserve Bank of India (RBI) has announced the provision to link credit cards with the Unified Payments Interface (UPI) and the integration will begin with RuPay credit cards. Both RuPay and UPI are operated by the National Payments Corporation of India (NPCI).

According to experts, the move by the RBI will ensure excessive use of credit cards among users as payment through UPI has widely been accepted in India already. UPI can so far be used to link debit cards and bank accounts.

“UPI has become the most inclusive mode of payment in India with over 26 crore unique users and five crore merchants on the platform. The progress of UPI in recent years has been unparalleled. Many other countries are engaged with us in adopting similar methods in their countries,” said the RBI governor Shaktikanta Das

In the last couple of years, India has seen a boom in the fintech companies and the recent RBI decision would enable them to have more consumers. “This will provide additional convenience to the users and enhance the scope of digital payments,” Das said.

However, before implementing the credit card linkage, RBI has to settle down on the Merchant Discount Rate (MDR) which is charged by issuing banks from merchants to complete a transaction. So far, there is no MDR in place for transactions using debit cards.

Experts are viewing this move as a step towards clamping down on rising inflation. The use of credit-led transactions has been seen as beneficial to the country’s economy.