Credit card can now be used to pay local chaiwala using UPI: Mohit Bedi of Kiwi explains how

The Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) have allowed Rupay credit card to be linked to UPI. Kiwi, a credit card platform, has received certification from NPCI, making Kiwi the first Indian app to offer "Credit on UPI" by partnering with banks to issue Rupay Cards. Mohit Bedi, Co-Founder and Chief Business Officer, KIWI, tells Business Today in detail how does credit card on UPI works. 

BT: How does credit on UPI work?

Mohit Bedi: RBI & NPCI has allowed Rupay credit card to be linked to a Virtual Payment Address (VPA)/UPI ID. Cardholders will be able to scan QR at the merchant establishment and pay through their linked UPI ID. Earlier, UPI users only had the option of paying for these transactions through the Savings Account/Debit card. Users now, after linking their credit card with their UPI ID, will be shown both their credit card and saving account with the option to choose the source of payment.

BT: What is the procedure if one wants to avail credit on UPI?

Mohit Bedi: One can avail credit on UPI through only Rupay credit cards. But the current Rupay credit card share being around just 3% is testament to the fact that majority of the existing cardholders do not have a Rupay credit card and will have to get on to experience credit on UPI. 

The current process involves a complex journey that both existing credit cardholders and non-credit cardholders have to go through which is apply for a Rupay credit card with an issuing Bank (that is live with this feature of credit on UPI) either digitally through the Mobile Banking App/Netbanking or offline by going to a branch complete the onboarding process by getting their KYC done.

It takes about 7-10 days for the physical card to get delivered to the user post approval. The user will then have to link the physical card manually with a Third Party Application (TPAP) which has credit on UPI enabled on the app to start transacting. The user has to interact with 2 different apps - Bank app for getting a Rupay credit card & a TPAP for transacting with it on credit on UPI and wait for about 7-10 days between the process, making it incommodious.

Kiwi solves this gap. It helps one apply for a Rupay credit on the app itself. An individual can download the app and go through a simple & intuitive onboarding process which is a completely digital journey. After the KYC and eligibility approval from the Bank, the user would get the virtual UPI-enabled credit card within minutes. This is instantly linked to their UPI ID and the user can avail the feature of making merchant payments through their credit card, on UPI. 

BT: What services are offered by Kiwi? How is it different from availing credit service through other credit cards?

Mohit Bedi: Kiwi is the first app in India that will help customers experience “credit on UPI” by issuing Rupay cards in partnership with banks. With this launch, Kiwi aims to create one of the largest direct-to-consumer (D2C) models in the credit market through its cutting-edge mobile application, which offers users the ability to make payments using either a credit card or bank account directly through their phones in a secure manner.

BT: What are the charges for using credit on UPI? What should one know before availing the feature?

Mohit Bedi: For the customer, if we had to say in simple words, Kiwi will never charge anything extra now or in future. No card fees, no convenience charge, no hidden charges. Thats a Kiwi Promise. What the customer should know is that actually, customers will always be rewarded for doing “credit on UPI” transactions. No scratch card, not “Better luck next time”, no lottery. That's our commitment as we go to the market.

BT: How are reward points given?

Mohit Bedi: Customers get rewards in the form of “Kiwi’s” on every card transaction, whether it's “Scan and Pay” at the local chatwala or an online card transaction done on Amazon or flipkart. These Kiwis get accumulated after every transaction. The user can choose to claim these “Kiwis” whenever they wish too. Just click on the “Claim” button and the amount gets credited to their Savings Account linked with their UPI ID, instantly. It's that simple.

BT: What happens if fraud happens?

Mohit Bedi: That's a very pertinent question and customer safety is paramount as we step into the “credit on UPI” ecosystem. The Kiwi app is certified by NPCI and the Rupay cards being issued are powered by one of the leading private sector banks in India. To ensure customer safety, the robust and time tested fraud rules placed by NPCI, the bank and ours will work in tandem. One needs to remember that this is a transaction on UPI rails and the Rupay card network. “credit on UPI” is combining the 2 rails which have stood the test of time and garnered customers trust already.

BT: What happens if one misses the payment?

Mohit Bedi: The repercussions are similar to any credit card payment delay. Which means, there will be an interest rate that customers will have to bear along with penal charges. It's not only the monetary impact, there is an impact on customer bureau scores as well. Hence Kiwi would advise customers to be careful. The Kiwi app will also have a card payment option, at the click of a button and will display their “credit Scores” real time. As we said, we are a “All-in-one” credit on UPI App. While we encourage spending, we will ensure customer education and payment convenience as well.

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