By Shyamu Maurya
Copyright informalnewz
The National Payments Corporation of India (NPCI) is reportedly developing a new feature that will allow users to convert their Unified Payments Interface (UPI) payments into monthly installments (EMIs). Learn how the new feature will work.
New UPI Feature: If you frequently use UPI for payments, there’s good news for you. Soon, you’ll be able to convert your UPI payments into EMIs. The National Payments Corporation of India (NPCI) is reportedly developing a new feature that will allow users to convert their Unified Payments Interface (UPI) payments into monthly installments (EMIs). According to a report, this move is part of NPCI’s strategy to promote credit products and accelerate the next phase of growth in retail digital payments.
A report in the Economic Times (ET), citing sources familiar with the matter, claims that NPCI is preparing to enable fintech companies to integrate an EMI payment feature that will allow customers to instantly convert their UPI transactions into EMIs. This feature is expected to help NPCI promote more credit transactions through the UPI network.
How could EMI work on UPI payments?
According to the report, the experience would be similar to making card payments at point-of-sale (PoS) terminals, where customers can instantly convert card swipes into EMIs.
Following the widespread adoption of RuPay credit cards on UPI and the introduction of credit lines on the UPI network, NPCI is reportedly considering this feature. Some banks have already partnered with fintech companies like Navi and Paytm to provide UPI users access to such credit lines.
In a statement to ET, Navi CEO Rajeev Naresh said: “Today, we are not yet live with EMI, but the next version – which has been permitted by NPCI through its product guidelines – will allow consumers to split payments into EMIs when scanning a QR code (with certain terms and conditions).”
However, Navi has not yet launched this feature; the Sachin Bansal-backed company is investing heavily in UPI, focusing on credit-based payments, which it believes will help build a sustainable business model for UPI apps.
Fintech founders argue that credit over UPI opens up revenue opportunities, while merchants cannot be charged any fees due to the government’s zero-fee mandate on RuPay debit cards and UPI payments for savings account-based transactions.
A Gurugram-based fintech founder told ET that NPCI has set an interchange fee of around 1.5% on UPI credit lines, making it a clear revenue channel.
Speaking to ET last week, PayU CEO Anirban Mukherjee highlighted the growing opportunity for instant credit over UPI, saying, “UPI is becoming more than just a payment process; it is evolving into a full-fledged payment system.”
Like cards that support debit, credit, and EMI payments, UPI is also expected to create its own credit ecosystem, which can provide checkout financing to millions of consumers who currently do not have a credit card.
Today, UPI handles approximately 20 billion transactions every month, and has an active user base of 250-300 million. The report also cites industry experts who believe that doubling credit on the platform is essential to further expand and bring in more payment types, and NPCI is actively working towards this end.
