RuPay is becoming the card of choice; all credit to UPI

With the exponential rise in credit card transactions routed through UPI, RuPay credit card, India's domestic card network, has emerged as the biggest beneficiary. Data from Bernstein shows that UPI-linked credit card transactions now account for nearly 40% of the total by volume.

That share has quadrupled - from 10% - at the end of FY24. The share by value has increased by a similar proportion - to 8% from 2%.

RuPay has seen its credit card market share climb to nearly 16%, from just 3% two years ago, after the RBI allowed RuPay credit cards to be linked exclusively to the UPI platform in late 2022. At the end of September 2025, more than 11.33 credit cards were active in India.

"A combination of wider merchant acceptance and a lower MDR structure for smaller merchants has accelerated adoption," said Pranav Gundlapalle, head of India financials at Bernstein, in a note. "If UPI linkage remains exclusive to RuPay, it is poised to emerge as the dominant network in credit cards, potentially commanding an even higher share than that reported earlier by the Ministry of Finance - where RuPay credit cards accounted for 50% of new issuances and 30% of transaction volumes as of June 2024." More than 50 million merchants now use UPI for transactions, while merchants with point-of-sale devices that accept all credit cards number fewer than 10 million. RuPay credit card transactions on UPI attract merchant discount rates (MDR) only for large merchants and for transactions above ₹2,000 at small merchants - enabling much wider acceptance among smaller retailers.

Experts say UPI-linked credit lines are expanding credit acceptance through QR payment rails, while RuPay-linked incentives are driving activation and usage.

"Linking of RuPay credit cards on UPI has revolutionised digital payments by combining UPI's simplicity with credit flexibility," PwC India said in a recent report. "Users can make seamless QR-based transactions while enjoying rewards and consolidated billing. This innovation has significantly boosted credit card adoption and usage, fuelling transaction volumes and deepening credit penetration."

Gundlapalle added that credit card transaction volumes could rise meaningfully as UPI expands credit acceptance among small merchants. However, revenue growth may lag, as most small-ticket transactions below ₹2,000 currently incur no MDR. The average transaction size for UPI-linked credit card spends is below ₹1,000 today.

Among issuers, SBI Cards is witnessing a sharp rise in UPI-linked credit card transactions, reflecting a trend similar to UPI's early disruption of debit cards. UPI-focused players such as Paytm also stand to benefit as credit transactions increasingly shift to UPI rails.