UPI Now Pay Later: Customers Can Make UPI Payment Even if there is No Money in the Bank Account, Know How

Do you know that even if you do not have enough money in your bank account, you can still make payment through your Unified Payments Interface (UPI) application. The Reserve Bank of India (RBI) has now allowed banks to provide credit line facility to UPI users. You can spend from the pre-approved credit line and pay the bank later. Let us know how it works and what kind of charges have to be paid?

UPI Now Pay Later Facility

RBI has recently given the ability to transfer money from pre-approved credit lines in banks through UPI network. RBI said in a notification issued on September 4 that under this facility, payment through a pre-approved credit line issued by a listed commercial bank to individuals with the consent of the individual customer, has been enabled for transactions using the UPI system. This step allows you to link these credit lines issued by banks to UPI and make payments.

What has changed for users?

Till now, individuals could only link their savings accounts, overdraft accounts, prepaid wallets and credit cards to the UPI system. But now you can also use your pre-approved credit line to do UPI transactions.

What is Pre Approved Credit Line for UPI Users?

Pre-approved credit is nothing but an overdraft facility provided by banks. According to bank websites, this facility can be used through UPI applications like Google Pay, Paytm, MobiKwik and mobile banking UPI applications. First of all, banks have to take consent from the customer to establish a credit line. There will be a fixed limit to it. Once it is approved, you can spend that pre-approved amount through the UPI app and later repay your dues by the due date.

What are the interest rates and other charges?

The charges or service charges for using pre-approved credit limit on UPI will vary from bank to bank. For example, HDFC Bank charges interest rate on the credit amount spent, while ICICI Bank charges service charge on spending above a certain limit. HDFC Bank customers get a credit limit of up to Rs 50,000 with a maximum credit tenure of six months.

Some banks charge interest on the amount utilized from the credit line, while some offer credit free tenure, which means no interest if the amount utilized is repaid within a predetermined time period. It will take.

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