Want to UPI Now And Pay Later? Learn How To Do A UPI Payment With Insufficient Account Balance

Have you heard about the recent change in UPI transactions that allows you to make payments even when your account is low on funds? Well, on September 4, the Reserve Bank of India (RBI) introduced a groundbreaking feature that permits banks to offer a credit line facility to UPI users. This means you can use UPI to spend on credit up to a predefined limit. Let's delve into the details of this innovative development.

What's New in UPI for Users ?

Traditionally, UPI users could link their current accounts, overdraft accounts, prepaid wallets, and credit cards to the UPI system. However, the game-changer is that you can now conduct UPI transactions using a pre-approved credit line. Here's how it works.

Understanding the Pre-Approved Credit Line

The pre-approved credit line is essentially an overdraft facility extended by banks to their UPI users. This feature can be utilised with popular UPI apps like Google Pay, Paytm, Mobiqui, and more. To activate this credit line, you'll need to grant permission to your bank. Once approved, you can use this credit line through UPI just like any other payment method. Some banks may charge interest on the utilised credit line, while others might provide a grace period for repayment. It's akin to the "Buy Now, Pay Later" concept.

How to Access the UPI "Pay Later" Benefit

If you're interested in using the UPI Now Pay Later feature, start by contacting your bank to inquire about the option. Many banks have already introduced this feature, and with your consent, they will activate your credit line. Some banks may require a one-time processing fee to enable this service, such as HDFC Bank, which charges approximately Rs 150.

Important Considerations

Credit Limit: HDFC Bank and ICICI Bank are offering credit lines of up to Rs 50,000 under the UPI Now Pay Later facility . The specific credit limit you receive will depend on your credit score.

Merchant Payments: Currently, this feature only allows UPI payments to merchants, not peer-to-peer transfers.

Charges: Different banks may apply varying charges for activating, using, and not making timely payments on this facility. Be sure to check with your bank for their specific terms and conditions.

The recent RBI update has brought an exciting change to the world of UPI payments. With the UPI Now Pay Later feature, you can shop with ease and settle your bills later, offering a new level of convenience to UPI users across India.