Explained: UPI Now, Pay Later

It is a financial service allowing users to make payments via UPI even with insufficient funds, repaying later, with interest or interest-free option.

RBI's New UPI Expansion

Following the RBI's recent expansion of UPI, banks are now allowing users to make payments using pre-sanctioned credit lines.

Proposed in September

RBI's notification on September 4 proposed widening the UPI's scope to include transfers from pre-approved credit lines.

With Terms & Conditions

Banks have the authority to set terms and conditions for the use of these credit lines, as per their board-approved policies.

Reduced Cost of Credit

This development enables UPI to support credit-funded payments, reducing costs, and encouraging unique Indian market products.

How Does It Work

Customers receive a pre-approved credit limit & can utilize it through their UPI app, even when their bank account has insufficient funds.

Like A Credit Card Bill

Users can repay the borrowed amount, similar to settling a credit card bill. Banks have the flexibility to establish interest rates.

45-Day Interest-Free

Some banks offer a 45-day interest-free period, similar to "buy now, pay later" scheme. You are charged no interest.

Which Banks Offer It

HDFC and ICICI introduced PayLater via UPI, with HDFC creating a new account for payments through an overdraft.

ICICI's Offer

ICICI Bank offers a 45-day digital credit service via PayLater, debiting dues from the user's account.

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