Zero Balance? No Problem! UPI’s Credit Feature Makes Payments Easy

India’s Unified Payments Interface has transformed digital payments, and its latest feature allows users to make transactions even with zero bank balance using a pre-approved credit line. Launched by the Reserve Bank of India (RBI) in September 2023, this facility, offered by banks like HDFC, ICICI, and Axis, lets users pay merchants via UPI apps like PhonePe, Google Pay, and Paytm. Highlighted on X as a “game-changer,” this credit line feature enhances financial flexibility, making it ideal for emergencies or seamless shopping without immediate funds.

How the Credit Line Works

The UPI credit line acts like a Buy Now, Pay Later (BNPL) service, where banks provide a pre-sanctioned credit limit linked to your UPI ID. Users can pay for groceries, bills, or online purchases by selecting the credit line option in their UPI app. For example, ICICI Bank’s PayLater offers up to 45 interest-free days, with a ₹75 service fee per ₹3,000 spent. X users have shared, “Zero balance? No worry, UPI credit saves the day!” Payments are restricted to merchant transactions, not peer-to-peer (P2P), ensuring focused use.

Simple Steps to Activate

To use this feature, apply through your bank’s UPI app or branch. Eligibility requires being an Indian resident over 18 with a valid PAN, Aadhaar, and a linked bank account. After approval, link the credit line to your UPI app: open the app, select “Add Credit Line,” choose your bank, verify with Aadhaar OTP or debit card, and set a unique UPI PIN. Transactions mirror regular UPI payments—scan a QR code, select the credit line, and enter your PIN. X posts praise the ease, with one stating, “Setup took 2 minutes!”

Benefits and Convenience

 The credit line eliminates the need for credit cards, offering instant access to funds for daily needs. It’s ideal for small-ticket purchases, with limits set by banks based on creditworthiness. Apps like Bajaj Finserv BBPS simplify bill payments, ensuring no service disruptions. Unlike credit cards, there’s no extensive documentation, making it accessible to more users. X users call it “a lifeline for sudden expenses,” noting its role in boosting financial inclusion.

Do’s and Don’ts

To use the credit line responsibly, repay dues within the interest-free period (typically 45 days) to avoid high interest rates, which can exceed personal loan rates. Never share your UPI PIN or OTP, and monitor your credit limit to avoid declined transactions. With proper management, this UPI feature offers unmatched convenience for India’s digital payment users.