7 MinsOct 28, 2020
Thanks to digital technology today you can apply for and get a loan or a credit card in a jiffy. Thanks to the same digital technology, repayments of your loan instalment and credit card dues too can be done instantly. For instance, banks such as Axis Bank, now allow you to pay your loan EMI and credit card dues using UPI. Let us see how.
What is UPI?
Unified Payments Interface is a real-time payment system where a Virtual Payment Address (VPA), also known as UPI ID, is associated with your account and can be used to send and receive funds to other accounts and make payments. A UPI ID is in the format xxxx@upiprovider where UPI provider is usually your bank. This linking of UPI ID / VPA and account can be done through a bank’s own mobile banking app or an app from a UPI Payment Service Provider (PSP).
For example, on the BHIM Axis Pay app, you don't need to have an Axis Bank account – you can choose any existing bank account to create and use a UPI ID as long as it is supported by your bank account. This allows the convenience of having one particular UPI ID on your own bank’s mobile banking app and another on a PSP app, both connected to the same bank account.
Using UPI for Credit Card payments
Now you can experience the convenience of UPI in your credit card payments as well, thanks to the new features from Axis Bank. Only Axis Bank Credit Cards can be paid using this process. To pay your credit card bill with UPI, here are the steps you need to follow:
- Step 1: Log in to your UPI Payment Service Provider app such as BHIM Axis Pay
- Step 2: Create a UPI ID on BHIM Axis Pay by choosing your bank and the correct bank account registered to your mobile number. This is applicable only if you are using UPI for the first time.
- Step 3: Initiate a transaction with the receiving VPA as cc.91<registered mobile number><last 4 digits of credit card>@axisbank. For example cc.9192498680825514@axisbank
- Step 4: This VPA will be verified and the name of the cardholder will be displayed.
- Step 5: Enter the payment amount and authenticate the transaction with UPI PIN.
- Step 6: The payment confirmation status will display as - i) Name of Customer linked to Credit Card Account ii) Transaction Success/Failure iii) Failure reason (if any)
[Also Read: Tips to use UPI safely and transact with ease]
The daily and per-transaction restriction of ₹1,00,000 is also applicable to these payments.
To ensure a smooth experience for repaying your credit card outstanding using UPI keep the following in mind:
- Make sure the card is active. Payments are not allowed via UPI for permanently blocked cards or if payments are 90 days past due.
- The service is not available to NRI customers.
- While making the payment by UPI, please ensure that registered mobile number linked to the credit card is used in the UPI ID format.
Using UPI for Loan EMI payments
Axis Bank has also enabled overdue loan repayments via UPI for all kinds of retail loans, except NRI loans. Regular EMI payments cannot be paid via UPI. Here’s how it works:
- Step 1: Log in to the UPI PSP of your choice.
- Step 2: Create a UPI ID on the app by choosing your bank and the correct bank account registered to your mobile number. This is applicable if you are using UPI for the first time.
- Step 3: Initiate a transaction to Loans.@axisbank such as Loans.PPR456789012345@axisbank.
- Step 4: This VPA will be verified and the name linked to the loan account will be displayed.
- Step 5: Enter the amount and UPI PIN to make the payment.
- Step 6: The payment confirmation status will display as - i) Name of Customer linked to Loan Account ii) Transaction Success/Failure iii) Failure reason (if any)
There are some things to keep in mind to ensure a smooth experience, such as:
- Make sure that the loan account is active.
- Enter the full loan account number.
- In the case of alphanumeric account numbers, enter the alphabets too.
- The payment will fail if the paid amount is greater than outstanding EMI + any overdue charges.
- The service is not available to NRI customers.
What are the benefits of using UPI for loan and credit card repayment?
There are several benefits to using UPI for making loan and credit card payments. You can pay your loan/credit card dues from any bank account or any UPI app at any point of time via UPI.
There is no need to use an Axis Bank account for the same. Also, as compared to other commonly used modes of repayment, payment via UPI is received instantly. This is critical in case of overdue loan instalments, in order to avoid late payment penalty.
We have listed out a few benefits here:
- Familiarity: If there is a particular UPI app that you are familiar with, you can make your monthly credit card payments and overdue loan payments from that app as long as you follow the instructions above.
- Simplicity: All you need to know is the dynamic VPA format and the identifying numbers for the loan or credit card you are paying for. You don’t need to remember any complicated login IDs or passwords apart from the one you are already using for the UPI app of your choice.
- Instantaneous payments: All UPI payments are instant and are reflected immediately.
- Quick resolution: In case payment fails, it is resolved daily and refunds are made within T+2 days.
So now use your UPI id not just for purchases but also for your repayments, seamlessly and conveniently.
Disclaimer: This article has been authored by Siddharth Parwatay, a Mumbai based independent tech-journalist, editor, and content-creator. Axis Bank doesn't influence the views of the author in any way. Axis Bank and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision