Normal bank account link UPI and CC on UPI are two different things. Both are separate networks similar to the debit card and credit card networks.
Initially, CC on UPI utilizing the normal UPI network for accepting payments but now, gradually, NPCI has built a separate network solely for CC on UPI. Tieup with all payment gateways, payment companies and big merchants.
Big merchants require direct certification from NPCI or an NPCI partner to accept CC on UPI. That is why some big merchants are still not accepting CC on UPI.
If you have noticed, there are some online big merchants who initially accepted CC on UPI, then either stopped or removed the UPI option in between, and now have started accepting CC on UPI again. Why is that ?
Because all big merchants need to tieup separately for the CC on UPI network.
The reason for the ₹10 surcharge mentioned in the OP’s question is because CC on UPI operates on the credit network. This is not the normal UPI network.
Now, Credit Line on UPI products are also coming up. You might have read the news that NPCI recently partnered with Razorpay and PayU for accepting Credit Line on UPI payments.
NPCI now needs to tie up with all big merchants, payment companies and payment gateways for Credit Line on UPI as well.
It’s a time-consuming job, and it will take decades for people to even understand this normal UPI and CC on UPI are separate networks, similar to the debit card and credit card networks.