UPI Now, Pay Later: Not enough money in bank account? You can still do UPI transactions and pay later; how to use

economictimes.indiatimes.com:

RBI) has now allowed banks to offer a credit line facility to UPI users. You can spend from a pre-sanctioned credit line and repay the bank later. How does it work? Read on to find out.

UPI now, pay later: New UPI feature unveiled
The RBI has recently enabled transfers from pre-sanctioned credit lines at banks through the UPI network.

“Under this facility, payments through a pre-sanctioned credit line issued by a scheduled commercial bank to individuals, with the prior consent of the individual customer, are enabled for transactions using the UPI system," the RBI said in a notification on September 4, 2023. This move allows you to link these credit lines issued by the banks to the UPI and make payments.
Use UPI pay later: What has changed for users?
Till now, individuals could only link their savings accounts, overdraft accounts, prepaid wallets, and credit cards to the UPI system. But now, you can also use your pre-approved credit line to make UPI transactions.

Let's explain how it works.

What is a pre-approved credit line for UPI users?
Pre-approved credit is nothing but an overdraft facility offered by banks. This facility can be used through UPI applications such as Google Pay, Paytm, MobiKwik, and, mobile banking UPI applications, as per bank websites. First, banks have to take consent from you to set up a credit line.

There will be a specified limit. Once it is approved, you can spend that pre-sanctioned amount to spend through UPI app and clear your dues later by the due date. Some banks charge an interest on the amount used from the credit line, while some offer a credit-free period, which means there is no interest on the amount being used.