What Is the New ‘Pay With Mutual Fund’ UPI Feature?

Kokila Chokkanathan
India’s Unified Payments Interdata-face (UPI) has introduced a revolutionary way to pay, allowing users to settle bills, shop online, or even grab their morning coffee using their mutual fund investments. Here’s a breakdown of what this feature offers and how it works.

1. Introducing ‘Pay With Mutual Fund’

The ‘Pay With Mutual Fund’ feature lets users directly pay using their liquid mutual fund holdings, without the need to first redeem them into a bank account. This integration merges investment and payment convenience, offering a seamless financial experience.

2. How Does It Work?

· Link Your Fund: Users can link their liquid mutual fund account to their UPI ID.

· Select Payment Mode: At checkout or payment, choose ‘Pay with Mutual Fund’ as the payment option.

· Instant Deduction: The amount is debited directly from the mutual fund in real-time, typically within a few minutes.

3. Benefits of Paying With Mutual Funds

· Instant Liquidity: No waiting for redemption; funds are accessed instantly.

· Earn While You Spend: Money remains invested in the mutual fund until payment, potentially earning better returns than a savings account.

· Simplified Payments: Eliminates the need to transfer money between fund and bank accounts.

4. Security and Safety

The feature is regulated by SEBI and integrated with UPI’s secure ecosystem. Transactions are encrypted, and users receive notifications for every payment, ensuring transparency and safety.

5. Where Can You Use It?

Currently, the feature supports payments at select merchants, online platforms, and utility bills. Over time, the aim is to expand to retail stores, e-commerce sites, and even peer-to-peer payments.

6. Who Can Use It?

· Users with active liquid mutual fund accounts from participating fund houses.

· KYC-compliant UPI users with linked bank accounts.
This opens up a new way for investors to leverage their savings without disrupting investments.

7. Why It Matters

‘Pay With Mutual Fund’ is a game-changer in wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW">digital payments, bridging the gap between investing and everyday spending. It encourages users to keep money invested, reduce idle cash in savings accounts, and enjoy the flexibility of UPI payments.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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