The National Payments Corporation of India (NPCI) is sharpening its focus on credit-led growth within the Unified Payments Interface (UPI) ecosystem. Following the introduction of RuPay credit cards and credit lines on UPI, the corporation is now preparing to launch a feature that would allow consumers to convert UPI transactions into equated monthly instalments (EMIs).
According to people familiar with the development, NPCI has cleared the way for fintech companies to integrate an EMI option into UPI. This will enable users, while scanning a QR code, to split their payments into EMIs in real time—akin to the way cardholders can convert purchases into instalments at point-of-sale (PoS) terminals.
While the feature is not yet live, several fintechs are gearing up for its adoption. Navi’s chief executive officer Rajiv Naresh confirmed that NPCI has already provided product guidelines to enable the service. “Today, we are not yet live with EMI, but the next version will allow the consumer, at the point of scanning the QR code (subject to certain terms and conditions), to split payments into EMIs,” he said.
This move comes after RuPay credit cards gained traction on UPI and banks began offering credit lines in partnership with fintechs such as Navi and Paytm. Sachin Bansal-backed Navi, for instance, has prioritised UPI as its key channel to expand its credit products, with the belief that these features can support more sustainable business models for UPI-based apps.
A central motivation for fintech firms lies in the ability to generate income from credit payments on UPI. Currently, savings account-based transactions do not allow service providers to charge merchants, as the government has mandated zero merchant discount rates (MDR) on RuPay debit cards and UPI payments.
By contrast, NPCI is reported to have set an interchange fee of around 1.5% on credit lines via UPI. This fee structure has reassured fintech founders and banks that credit-led products can open up fresh revenue opportunities, fuelling further innovation and adoption in the digital payments sector.
