RuPay Credit Card Transactions on UPI Surge, Boosting Domestic Network's Market Share

India's domestic card network, RuPay, has emerged as a major beneficiary of the increasing use of credit cards via the Unified Payments Interface (UPI). Data from Bernstein indicates that UPI-linked credit card transactions now represent nearly 40% of the total volume, a significant jump from 10% at the end of the fiscal year 2024. The value share has also seen a similar proportional increase, rising to 8% from 2%.

RuPay's credit card market share has climbed to approximately 16% from just 3% two years ago. This surge follows the Reserve Bank of India's decision in late 2022 to allow RuPay credit cards to be exclusively linked to the UPI platform. As of September 2025, India has over 11.33 million active credit cards.

Pranav Gundlapalle, head of India financials at Bernstein, noted that "A combination of wider merchant acceptance and a lower MDR structure for smaller merchants has accelerated adoption." He added that if UPI linkage remains exclusive to RuPay, it could become the dominant network in credit cards, potentially surpassing previous Ministry of Finance reports indicating RuPay credit cards accounted for 50% of new issuances and 30% of transaction volumes as of June 2024.

More than 50 million merchants currently use UPI, whereas fewer than 10 million have point-of-sale devices accepting all credit cards. RuPay credit card transactions on UPI benefit from attracting MDR only for large merchants and for transactions above ₹2,000 at small merchants, leading to much broader acceptance among smaller retailers.

Experts suggest that UPI-linked credit lines are expanding credit acceptance through QR payment systems, while RuPay-linked incentives are driving activation and usage. PwC India's report highlights that linking RuPay credit cards on UPI has "revolutionised digital payments by combining UPI's simplicity with credit flexibility," enabling seamless QR-based transactions, rewards, and consolidated billing, thereby boosting credit card adoption and usage.

However, revenue growth might lag as most small-ticket transactions below ₹2,000 currently incur no MDR, with the average transaction size for UPI-linked credit card spends below ₹1,000.

Issuers like SBI Cards are observing a sharp increase in UPI-linked credit card transactions, mirroring UPI's earlier impact on debit cards. UPI-focused players such as Paytm are also expected to benefit from the shift in credit transactions to UPI rails.

Impact: This development significantly enhances digital payment convenience and credit accessibility for consumers and small merchants. It bolsters India's domestic payment network, potentially reducing reliance on international card schemes and fostering innovation in financial technology. For investors, it signals growth opportunities in companies supporting this ecosystem. Impact rating: 8/10.

Difficult terms: UPI (Unified Payments Interface): A real-time payment system developed by the National Payments Corporation of India (NPCI) allowing users to transfer money instantly between bank accounts using a mobile app. RuPay: India's own card network, designed to facilitate electronic payment transactions. MDR (Merchant Discount Rate): A fee that merchants pay to banks for accepting card payments. It covers transaction processing costs, interchange fees, and acquiring bank fees. QR code (Quick Response code): A type of matrix barcode that can be scanned using a smartphone to provide information or access services, often used for payments.