Credit Push: NPCI Exploring EMI On UPI Payments

In a bid to further increase the usage of the Unified Payments Interface (UPI), the National Payments Corporation of India (NPCI) is reportedly working on allowing users to convert their payments into EMIs.

The payments body is set to allow fintech companies to integrate the feature to allow users to convert their UPI payments into EMIs, Economic Times reported.

The feature would be similar to payments made via cards at PoS terminals, the report said, citing sources.

Notably, the NPCI already has two credit products for UPI – RuPay credit cards and credit line on UPI. 

The credit line on UPI feature was launched in 2023. It allows individuals and small businesses to obtain pre-sanctioned credit lines from banks, which can be utilised for transactions through UPI.

A number of fintech startups like Paytm and PhonePe currently offer the credit line on UPI feature. In fact, Paytm relaunched its BNPL product as a credit line on UPI last week.

Meanwhile, the RuPay credit card for UPI was launched in 2022. The feature is now extensively used, with many startups promoting it. Last month, Kiwi raised INR 208.5 Cr (around $24 Mn) to make UPI-linked credit cards mainstream. 

NPCI MD and CEO Dilip Asbe said earlier this year that nearly 16% of all credit card spending in India was processed via the RuPay network. About half of these credit card transactions, as per Asbe, were routed via UPI.

The launch of EMI feature for UPI payment is expected to power the next phase of growth for UPI and help the NPCI inch further closer to its target of 100 Bn monthly UPI transactions. 

The number of UPI transactions grew 2.8% MoM to 20.01 Bn in August to touch a fresh all-time high. This was a jump of 34% YoY. The value of UPI transactions in August stood at INR 24.85 Lakh Cr as against INR 25.08 Lakh Cr in July.