UPI EMI Facility: Are Credit Card Days Over? Now Enjoy EMI Facility on UPI Payments!
UPI EMI Facility: The National Payments Corporation of India (NPCI) is set to bring a groundbreaking change to the Unified Payments Interface (UPI). From now on, UPI users will have the opportunity to pay in Easy Monthly Installments (EMI) at the time of payment. This new feature will elevate UPI from just a payment platform to a complete credit ecosystem.
How will this new facility work?
When a customer scans a QR code to pay after shopping, they will be presented with an option to choose EMI. This will be as simple as choosing an EMI option after swiping a credit card. This means you no longer have to rely on a credit card to buy expensive items. You can easily pay in installments through the UPI app itself.
Who will get this facility?
Initially, this facility will be available to customers who already have a pre-approved credit line from their bank. Banks will approve this credit line after reviewing their customers’ loan repayment history and credit score. This facility will provide customers with more flexible payment options and allow them to enjoy more freedom in their shopping.
New opportunities for fintech companies and banks
The introduction of the EMI facility on UPI will also create new revenue opportunities for fintech companies and banks. While UPI and RuPay debit card transactions are currently free, an interchange fee of about 1.5% will be levied on credit payments. Companies like Navi and Paytm, which already offer credit lines, are expected to benefit significantly from this new system.
Will UPI become an alternative to credit cards?
According to experts, this new facility will make small loans and “Buy Now, Pay Later” models more popular on UPI. As a result, even customers who do not have a credit card will be able to easily buy things and pay in installments. Currently, UPI processes about 20 billion transactions per month with 250-300 million users. The introduction of the EMI option is expected to further strengthen this network.
However, banks are proceeding with some caution in this matter due to the risk of bad loans associated with small consumer loans. All things considered, there is no doubt that this new step by UPI is going to open a new horizon in India’s digital payment system.
