NPCI implemented standard reward rates for RuPay credit cards on UPI transactions. Details here

Customers who use their RuPay credit cards to make payments on UPI (Unified Payments Interface) and other platforms will soon be able to earn the same reward points as their peers who use credit cards issued by other payment service providers for transactions.

The National Payments Corporation of India (NPCI) has asked banks to ensure parity on reward points and benefits for RuPay credit cards from September 1.

“Issuers shall ensure that the rewards points, benefits, features and other ancillary offers should not be lower (directly & indirectly) for RuPay credit cards on UPI transactions and RuPay credit cards, except for transactions where issuer does not earn any interchange fee,” Kunal Kalawatia, Chief of Products, NPCI, said in a directive to banks.

“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,” he said. “Member banks are expected to adhere to the circular by 1st September 2024,” Kalawatia said.

Incidentally, Reserve Bank of India (RBI) allowed the linking of RuPay credit cards with UPI in June 2022. In October 2023, the NPCI announced that interchange fee would be applicable on RuPay-UPI transactions but small merchants would be exempt from it.

Following this, several leading banks started offering digital versions of their existing credit cards to customers but it came as a RuPay card. For instance, if you have a regular credit card with Mastercard and Visa as the payment service provider, you can also get a digital RuPay credit card that can be used for UPI transactions.

Currently, reward points for RuPay credit cards for UPI transactions are lower than that of most popular credit cards. NPCI’s move is expected to bring parity in such benefits.

This means that if a regular credit card gives a 1% cashback on all transactions, its digital RuPay version will also have similar benefits. This will, however, will not be applicable to excluded categories and small merchant transactions that are lower than ₹2000.

So, what are the benefits that you get?

Credit cards typically offer cashback, reward points and free miles on certain transactions. Groceries, apparel, entertainment, restaurant, supermarket, telecom and utility bill payments can earn you cashback and reward points. The quantum of benefits depend on the type of credit card you use and the nature of the transaction.

Cashbacks are the easiest to understand and avail as card issuers offer a certain percentage of what you spend—usually from 1% to 5% of the transaction value--in the form of cash. They can be used to make payments, even to clear credit card bills.

Reward points are calculated as a percentage of the spend. They vary widely with best cards offering reward points for every ₹100 or ₹150 spent across all retail transactions. In most cases, spending on retail transactions alone earns reward points.

Some credit cards offer multiple times (2X, 5X and 10X) the spending as reward points for transacting on popular e-commerce portals such as Amazon and Flipkart. They also offer similar rewards for transactions on popular apps such as Swiggy and Zomato.

Customers have to redeem their reward points within a specified timeframe either in the form of instant vouchers or other modes to buy products. Free miles can be used while booking flights, trains and hotels.

Do all transactions earn you rewards?

Not all transactions get you cashback and rewards. Spending on fuel, goods bought under easy EMI (equated monthly instalments) and e-wallet loading will not win you any reward points. Transactions with a value of less than ₹150 also will not bring you any benefits.

You need to pay at least the minimum amount due on your credit card bill to redeem reward points. Reward points accrued will be reversed if a retail transaction is converted into a Smart EMI. Reward points are valid only for two years from the date of accumulation of the benefit. They will lapse if the card is inactive or dormant for more than 365 days.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.