NPCI Mandates Uniform Reward Rates for RuPay Credit Cards on UPI Transactions

In a swift, sudden, and welcome move the National Payments Corporation of India has issued a circular regarding the disparity in reward points earning for RuPay Credit Cards. Considering the importance of rewards on credit card transactions, NPCI has noticed that credit card issuers offer different reward rates for RuPay Credit Cards and RuPay Credit Cards on UPI. This makes RuPay Credit Cards less appealing and rewarding. NPCI has thus directed all member banks to bring changes to their reward structure by 1st September to bring parity in reward earnings between RuPay and non-RuPay credit cards.

According to NPCI “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.”

What Changes Can Be Expected from 1st September?

NPCI has directed that credit card 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.

One key point to note here is that issuers do not earn an interchange fee for transactions below ₹2,000.

View – Official Rewards Parity Circular

Bottom Line

RuPay credit cardholders, this is great news! Now, all cards will receive the same spending rewards, whether on UPI or not. However, it’s important to note that complete restructuring for UPI reward points will be required.

Many recent devaluations, such as changes in reward earnings for Tata Neu Credit Cards, will need to be revisited. We will have to wait and see how the banks/issuers react and cooperate with NPCI’s directions until 1st September. Some are even questioning NPCI’s authority to issue such circulars and directions since it’s not a regulatory body like RBI, while others are simply stating that even such efforts won’t be enough as merchants, big or small, many times do not accept RuPay credit card payments through UPI.