By Shyamu Maurya
Copyright informalnewz
NPCI is introducing EMI options on UPI, which will provide a new opportunity for fintech companies like Navi and Paytm and change the face of digital payments. Banks will be cautious.
New Delhi. The digital payments revolution in India is about to reach its next stage. The National Payments Corporation of India (NPCI) is introducing the EMI option on the Unified Payments Interface (UPI). This means that customers will now have the option to convert any payment made through UPI into an EMI at the same time. Following the introduction of features like RuPay credit cards and credit lines, this feature will be a significant step towards transforming UPI into not just a payment platform, but a complete credit ecosystem. This will not only benefit customers but also provide new revenue opportunities for fintech companies and banks.
According to NPCI, in the new version, whenever consumers scan a QR code, they will receive the EMI option. This will be similar to selecting EMI after swiping a card. While the fintech companies have not yet gone live, the rules have been finalized and will soon be implemented on a large scale.
Fintech companies will get a big opportunity
Companies like Navi and Paytm already offer credit lines in collaboration with banks. The EMI feature will further strengthen their business model. While there are no charges for UPI and RuPay debit cards, credit payments will be subject to an interchange fee of approximately 1.5%. This will open up new revenue streams for the fintech sector.
Credit will change the face of digital payments
PayU CEO Anirban Mukherjee has stated that UPI will no longer be just a payment tool, but will become a full-fledged payment system. Even those without credit cards will now be able to take advantage of checkout financing. The industry believes that small loans and models like buy-now-pay-later will become increasingly popular on UPI. However, bankers note that small consumer loans carry the risk of bad loans. While loan growth will occur, banks will approach this cautiously. Currently, UPI processes approximately 20 billion transactions per month and has 250-300 million users. Therefore, the EMI option could significantly increase the network’s strength.
