National Payments Corporation of India, the state-owned entity that operates the homegrown RuPay credit card network, has urged credit card issuer banks to ensure parity between the rewards they offer on a UPI and Physical/Online Card presentation basis.
NPCI asks Credit Card issuers to fix rewards parity by September 1, 2024
Earlier this week, the National Payments Corporation of India (NPCI) issued a circular addressing some issuers’ differential reward points system for using UPI or a RuPay Credit Card. RuPay Credit Cards are currently the only ones available at scale on the NPCI-run Unified Payments Interface, allowing people to pay via their bank accounts to others with a QR code or a payment handle.
The circular reads
Credit card rewards points are a key lever to drive spending on credit cards. It has been observed that the rewards points, benefits & features for RuPay credit cards on UPI transactions are not equivalent to the rewards points, benefits & features offered on Card transactions.
Further, the NPCI has directed all the member banks of RuPay,
Issuers shall ensure that the rewards points, benefits, features, and other offers should not be lower (directly & indirectly) for RuPay Credit Cards on UPI transactions and RuPay Credit Cards, except for transactions where the issuer does not earn any interchange fee.
The Banks have been directed to comply by September 1, 2024. It is important to note that there is no interchange fee for UPI transactions less than INR 2000 in value, while a swipe earns a transaction fee.
Now, it remains to be seen whether the banks take this circular seriously or ignore it.
Bottomline
The NPCI has notified issuer banks of RuPay Credit Cards to bring parity to the rewards they offer for using the card directly (physical or online presentation) and via the UPI network. The Banks must line up their rewards programme by September 1, 2024.
What do you think of NPCI’s notification issued to banks about rewards parity?
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