Explainer: How will payment be done through UPI even if there is no money in the bank account? Answer to every question will be found here

Now UPI has solved another problem related to your payment. Now even if you do not have money in your account, you will still be able to make payment through UPI. How will this service work? What benefit will you get? You will get answers to every question here...

Your UPI app is now going to become a super app. As of now, you can make payment anywhere by linking your savings account, overdraft account, credit card and prepaid wallet account with UPI ID. From now on, even if there is no money in your account, you will be able to make UPI payment, that is, even if the balance is zero, UPI will still be the hero in making payments. Now how will this service work, how will you be able to take advantage of it? Answers to all questions will be found here.

The Reserve Bank of India has recently instructed banks to work on providing 'UPI Now, Pay Later' service to their bank customers. That means customers should have the freedom to make payments through UPI even if they have zero balance up to a fixed limit. Let us know how this service works…

How will UPI Now, Pay Later service work?

According to RBI guidelines, for 'UPI Now, Pay Later' service, banks will provide a 'pre-approved credit line' to their customers on the basis of prior permission. Despite having zero balance in the bank account, due to this credit line the customer will be able to make payment through UPI.

What will be 'Pre-Approved Credit Line'?

In actual terms, pre-approved credit line will be an overdraft facility of banks. Now this service can be used through apps like Google Pay, Paytm, Phone Pay and MobiKwik. Apart from this, this work will also be done through the mobile banking app of banks. Before setting up this credit line, banks will take permission from the customers. Once your credit line is approved, you will be able to make payments equal to this limit through your UPI app, and this amount will have to be repaid by the due date.

Will interest be charged on credit line?

RBI has left the decision of charging interest on credit lines to the banks. Some banks charge interest for it, while some banks keep it interest free for a fixed time. This will work to some extent like 'Buy Now, Pay Later' service.

These banks have launched the service

With the arrival of RBI guidelines, two private sector banks HDFC Bank and ICICI Bank have launched the service of 'UPI Now, Pay Later'. For this, HDFC Bank will charge you a one-time processing charge of Rs 149. After this, a 'Credit Line Account' will be opened which will be linked to your debit card.

ICICI Bank will give you a separate 'UPI ID' for this service. Through this you will be able to make payment using credit line from UPI app. ICICI Bank will not charge any charge for this.

Up to how much rupees will you be able to pay?

Currently only two banks have started this service. HDFC Bank and ICICI Bank will offer a maximum credit line of up to Rs 50,000 to each of its customers. This will be different for different customers. This will be decided by looking at his spending habits, credit history and income.

Will be able to make payment only to the shopkeeper

There is also a barrier with the 'UPI Now, Pay Later' service, that is, using the credit line, you will be able to make payment through the UPI app only to any shopkeeper or merchant. Common people will not be able to use this credit line to transfer money to each other's accounts.