UPI Pay Later: Latest Revolution in Online Payments

In the fast-paced world of digital transactions, UPI Now, Pay Later emerges as a game-changer. This feature allows us to make online payments without the immediate need for funds, making it an excellent solution for managing expenses and coping with financial emergencies. In today’s blog, we will explore the UPI Pay Later service in detail and also explore the basic features of services like HDFC Pay Later and ICICI Pay Later.

Understanding UPI Pay Later

UPI Pay Later is a recently introduced feature that empowers users to make online payments using a pre-approved credit line from their banks. The beauty of this feature lies in its flexibility. Users can seamlessly link their credit lines to the UPI system, granting them access to the ‘Pay Later’ option at the checkout page of various merchants and platforms.

How UPI Pay Later Works

Once you opt for ‘Pay Later,’ you can repay the borrowed amount within a specified period, which typically ranges from 15 to 90 days

  • The exact repayment terms may vary based on your bank and the plan you choose. 
  • Some banks offer interest-free periods, ensuring you won’t incur additional costs if you pay within this timeframe.
  • UPI Pay Later is a convenient lifeline for individuals facing cash crunches towards the end of the month or those needing instant credit for unexpected emergencies.

Benefits of Pay Later UPI

One of the prime advantages of Pay Later UPI is the ability to access short-term credit for online purchases and bill payments. 

Users have the freedom to repay the amount later, either with or without interest. This financial flexibility not only helps manage expenses but can also be a tool to improve your credit score, save on transaction fees, and access attractive deals and discounts from merchants.

The HDFC Pay Later Experience

HDFC Bank, a prominent player in the Indian banking sector, offers its customers the convenience of UPI Pay Later through a service known as FlexiPay. 

FlexiPay is a digital, zero-interest credit product that allows users to buy now and pay later, all while using their HDFC Bank debit card or credit card.

Key Features of HDFC Pay Later

Users can activate FlexiPay through various channels, including net banking, the HDFC app, or third-party UPI apps such as Google Pay, Mobikwik, Freecharge, and more. 

With a generous credit limit of up to Rs 50,000 per month, users can comfortably make UPI payments to any merchant or store. The repayment tenure is customisable, with options for 15 days, 30 days, 60 days, or 90 days, depending on individual preferences and budget.

To access this service, HDFC Pay Later charges a one-time processing fee of Rs 149 and a modest interest rate of 16% per annum on the borrowed amount.

The ICICI Pay Later Advantage

ICICI Bank, another renowned name in the Indian banking sector, offers its version of UPI Pay Later, known as PayLater by ICICI Bank. This digital credit product provides users up to 45 days of interest-free credit.

Utilising ICICI Pay Later

ICICI Bank provides a quick digital credit service that allows you to access funds for a period of up to 45 days. This credit can be used to pay bills, make online purchases, or instantly settle payments with any merchant via UPI ID. 

At the end of this credit cycle, the outstanding amount will be automatically deducted from your ICICI Bank savings account. 

It’s important to note that no interest is charged on this credit, but a service fee of Rs 75, along with applicable taxes, will be applied for every Rs 3,000 spent from your ICICI Bank PayLater account within a month.

  1. Instant Access to Funds: PayLater provides you with a quick digital credit line for emergency online purchases or bill payments. You can use this credit for immediate transactions and repay it within 45 days.
  2. Interest-Free Credit: PayLater offers interest-free credit if you clear the dues within 45 days. 
  3. Convenient Repayment: Repaying your PayLater balance is easy. Add the required funds to your linked Savings Account, and the bank will automatically deduct the outstanding balance. 
  4. Adequate Credit Limit: Your PayLater Account comes with a credit limit determined by the bank, typically ranging from Rs 5,000 to Rs 50,000. 
  5. Maintain Savings and Earn Interest: With PayLater’s interest-free credit for up to 45 days, you can keep a higher balance in your Savings Account, earning more interest. 

UPI Now, Pay Later: A Banking Innovation

The banking environment has witnessed a significant innovation with the introduction of UPI Now Pay Later. This feature, enabled by the Reserve Bank of India, allows users to link their pre-approved overdraft facilities from banks to the UPI system for seamless payments.

How UPI Credit Line Differs from a Credit Card on UPI

A UPI credit line differs slightly from a UPI credit card. Banks typically demand numerous documents for credit card issuance, excluding many without formal income records. 

UPI credit lines only require basic personal account verification, making it accessible to a broader range, including small borrowers and business owners, for managing working capital.


UPI Pay Later services offer users a lifeline for flexible online payments, including HDFC Pay Later and ICICI Pay Later. They empower individuals to manage their finances with ease and convenience. However, using these services responsibly is essential, as adhering to terms and conditions, and ensuring timely repayments to avoid penalties and safeguard your credit score.


What is PayLater in UPI?

PayLater in UPI is a feature allowing you to use a pre-approved credit line to make UPI transactions and pay within a specified time frame. It offers flexibility and convenience for managing expenses and emergencies.

How do I activate PayLater in UPI?

To activate PayLater in UPI, have an account with a participating bank like HDFC or ICICI, meet eligibility criteria, and apply through internet banking, mobile apps, or UPI platforms. You’ll receive a credit limit and a dedicated UPI ID for payments.

How can I get money from PayLater?

PayLater is for making payments, not receiving money. However, indirect methods like using Mobikwik or Paytm for transactions can allow you to access funds, but these methods come with potential risks and should be used with caution.

Can I transfer money from PayLater to a bank account?

PayLater doesn’t provide a direct transfer to a bank account. Indirect methods involving liquid funds or FASTag wallet top-ups can be used to move funds, but they may not be secure, reliable, or cost-effective and may attract income tax scrutiny.

Source economictimes.indiatimes.com


Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.