UPI Credit Cards Reshape Payments
UPI-linked credit card transactions grew 340% year-on-year in Q3 FY2026 (October–December 2025), according to NPCI data released on March 10, 2026. Total UPI credit card transaction volume reached ₹28,400 crore in the quarter — still small relative to overall UPI volumes of ₹78 lakh crore, but growing at a pace that is reshaping how banks and merchants think about credit access in India.
How UPI Credit Cards Work
UPI-linked credit cards use the RuPay credit card network to allow users to link their credit card — rather than a bank account — to UPI apps like PhonePe, Google Pay, and Paytm. When a customer makes a UPI payment, the transaction is settled against their credit card limit rather than debited immediately from their bank balance. This effectively brings credit card benefits (reward points, EMI conversion, credit buffer) to QR-code payments at 50 million+ merchants.
Leading Products
HDFC Bank's HDFC UPI RuPay Credit Card, Axis Bank's Flipkart Axis RuPay Credit Card, and ICICI Bank's Coral RuPay Credit Card are the top three products by issuance volume. HDFC alone has issued over 3.2 million UPI credit cards. The cards typically offer 1–3% reward rates on UPI transactions, with higher rates on partner merchant categories.
Merchant Impact
For merchants, UPI credit cards are processed at the same MDR as debit cards (0% for government-mandated categories, 0.5–0.9% for others) — significantly lower than traditional credit card MDR of 1.5–2.5%. This has made acceptance commercially viable for smaller merchants who previously rejected credit cards due to high fees.
