You May Soon Be Able to Convert Your UPI Payments into EMIs: What Indian Consumers Should Know!
Imagine turning any UPI payment into easy monthly installments—no credit card needed! The National Payments Corporation of India is about to launch a game-changing feature that could revolutionize how millions shop and pay digitally. Could this be India’s biggest leap in affordable credit yet? Discover how this new UPI-EMI fusion works, who benefits, and why it’s creating a buzz across fintech and retail sectors. Ready for the future of payments?
In an exciting development for Indian digital payments users, the National Payments Corporation of India (NPCI) is preparing to launch a revolutionary feature that will allow customers to convert their UPI payments into Equated Monthly Installments (EMIs). This move is expected to transform the way millions of Indians shop and manage payments digitally, expanding credit accessibility and promoting flexible repayment options. If you are a regular UPI user, this upcoming change could soon make high-value purchases more affordable without the need for traditional credit cards.
Understanding the UPI EMI Conversion Feature
Unified Payments Interface (UPI) has become the backbone of India’s digital payment ecosystem, with over 20 billion monthly transactions as of August 2025 and an active user base nearing 300 million. Traditionally, UPI transactions have been instantaneous payments debited directly from bank accounts, but the new EMI feature intends to introduce credit-based payment flexibility within the same platform.
How Will It Work?
- At the point of sale (PoS) or checkout (online or offline), when a customer scans a QR code and opts to pay via UPI, they will receive an option to convert their payment into EMIs.
- This process will be seamless and instantaneous, similar to how credit card users currently convert purchases into EMIs at PoS terminals.
- The option will be available for UPI payments supported by credit lines pre-approved by banks and fintech partners.
- Customers can split their total payment amount into convenient monthly installments instead of paying a lump sum upfront.
The Technology Behind It
NPCI has issued product guidelines to fintech companies, banks, and payment apps enabling them to integrate this EMI conversion feature. Fintech companies like Navi and Paytm, which already offer credit lines on UPI, are expected to be early adopters, providing their users with this enhanced experience soon.
Benefits of Converting UPI Payments into EMIs
1. Greater Payment Flexibility
EMI payments allow consumers to spread the cost of big-ticket purchases over several months, relieving immediate financial pressure. This is particularly beneficial in times of inflation or when facing unexpected expenses.
2. Inclusion of Non-Credit Card Users
India still has a large population that does not hold credit cards. The UPI EMI feature democratizes credit by extending EMI convenience to all UPI users with pre-approved credit, bypassing the need for credit card ownership.
3. Boost to Retailers and Merchants
With more consumers able to afford higher-value purchases via EMIs, merchants may experience increased sales volume and higher average ticket sizes.
4. Revenue Opportunities for Fintechs and Banks
Since government mandates zero merchant fees on savings account debit transactions via UPI and RuPay, credit-based transactions open new streams for revenue through interchange fees (around 1.5%). This incentivizes fintech and banking sectors to innovate and offer credit features on UPI.
How to Use the UPI EMI Feature: A Step-by-Step Guide
- Shop at a Partner Merchant: Choose any retailer or online platform that accepts UPI payments with EMI option.
- Scan QR Code: Use your UPI-enabled app to scan the merchant’s QR code.
- Choose Payment Mode: When the payment option appears, select EMI as your payment method (available subject to eligibility).
- Select EMI Tenure: Pick a convenient duration for repayment, e.g., 3, 6, or 12 months.
- Confirm Payment: Authorize the transaction, and the total amount will be split into monthly installments.
- Repay EMIs: Monthly payments will be deducted automatically or as per your arrangement.
Pro Tips for Consumers
- Check Your Credit Limit: Ensure you have a pre-approved credit line linked with your UPI ID.
- Understand Interest Rates: Verify the applicable interest or fees on EMI conversions to avoid surprises.
- Use for Planned Expenses: Use EMI options wisely; convert only necessary payments to EMIs to maintain financial health.
- Stay Informed: Keep updated with your fintech provider’s terms and conditions regarding credit usage through UPI.
Common Misconceptions and Clarifications
- Not All UPI Payments Will Support EMI: Initially, EMI conversion will be limited to transactions where credit lines are available and will not apply to all payments.
- UPI Debit Payments Remain Instant: The EMI option is an additional feature and will not affect normal savings account-backed UPI payments.
- Credit Score Checks Apply: Like any credit product, banks may assess customer creditworthiness before approving credit lines for EMI use.
Comparison: Traditional Credit Cards vs. UPI EMI Feature
| Feature | Credit Cards | UPI EMI Payments |
| Payment Method | Card Swipe/Online Payment | QR Code-based UPI transaction |
| Credit Access | Requires card issuance and approval | Credit line linked to UPI ID |
| EMI Conversion | Available at PoS or online checkout | Will be available at QR code payment |
| Merchant Fees | Merchant pays interchange fee | Interchange fee for credit transactions |
| User Base | Limited, especially in rural areas | Broad UPI user base, including rural |
| Convenience | Widely accepted, but needs card | Instant EMI conversion on payment |
Impact on the Indian Digital Payments Ecosystem
This initiative reflects NPCI’s strategic push to expand credit offerings on UPI, reinforcing its position as India’s premier digital payments infrastructure provider. By integrating credit options directly into UPI, NPCI is tapping into a vast market potential to fuel retail and e-commerce growth.
The move also aligns with broader financial inclusion goals, enabling millions of Indians to access flexible credit affordably. For fintech companies, it paves the way for sustainable monetization models beyond zero-fee mandates on debit transactions.
Key Takeaways
NPCI is launching a new feature allowing users to convert UPI payments into EMIs instantly at the point of sale or checkout. This will democratize credit access for non-credit card holders by enabling flexible installment payments through UPI apps. Early adopters like Navi and Paytm are preparing to integrate the feature, which will boost digital credit adoption and generate new revenue streams for fintechs and banks through interchange fees.
Final Thought and Call to Action
The ability to convert UPI payments into EMIs is set to revolutionize digital payments in India by making credit more accessible and payment schedules more manageable. Consumers should stay tuned for updates from their fintech providers and banks to leverage this facility as soon as it becomes available.
For merchants and fintech companies, this is an excellent opportunity to embrace and promote flexible credit offerings to enhance customer satisfaction and drive business growth.
