Transforming UPI Transactions: EMI Payments via QR Codes

The landscape of digital payments in India is on the cusp of a significant transformation. The National Payments Corporation of India (NPCI) is set to introduce a game-changing feature for users of the Unified Payments Interface (UPI). Soon, consumers will be able to split their UPI payments into Equated Monthly Installments (EMIs) simply by scanning a QR code. This advancement is poised to make digital transactions even more accessible and versatile.

Expanding UPI’s Capabilities

In recent years, the UPI platform has grown exponentially, becoming a cornerstone of digital payments in India. Initially focused on facilitating quick and easy transactions, UPI has gradually incorporated credit facilities, such as the integration of RuPay credit cards and credit lines. Now, by allowing payments to be converted into EMIs, NPCI aims to further enhance the platform’s utility, especially for high-value purchases.

How the EMI Feature Works

The upcoming feature will enable fintech companies to add an EMI option within the UPI framework. This will allow users to convert their transactions into convenient monthly payments instantaneously. Although the service has not yet been launched, it promises to function similarly to the way credit card payments can be split into EMIs at point-of-sale terminals.

The Strategic Impact

This development comes at a crucial time as RuPay credit cards on UPI continue to gain traction. By broadening the scope of UPI beyond mere payments, NPCI is strategically positioning it as a comprehensive financial tool. Collaborations between banks and fintech firms are underway to offer these expanded credit options to users, signaling a robust potential for growth.

Industry Perspectives

Leaders in the fintech space have expressed optimism about the upcoming EMI option. While the feature is not yet live, industry insiders anticipate that it will greatly facilitate consumer spending. Navi's CEO has indicated that the new system will empower users to split purchases into EMIs when scanning a QR code, provided certain conditions are met.

Additionally, the implementation of an interchange fee—approximately 1.5% on credit lines via UPI—has been highlighted as an opportunity for generating revenue. The move is seen as a catalyst for increasing credit transactions, with PayU's CEO noting the significant potential for instant credit facilities within the UPI ecosystem.

Revised Transaction Limits

Alongside the introduction of EMIs, NPCI has revised the transaction limits across various sectors. For investments and insurance, the cap has increased from ₹2 lakh to ₹5 lakh per transaction, with a daily limit set at ₹10 lakh. Similarly, government e-marketplace transactions and tax payments now have a limit of ₹5 lakh, elevated from the previous ₹1 lakh.

Travel bookings and credit card bill payments also see enhanced limits, allowing transactions up to ₹5 lakh, with a daily allowance of ₹6 lakh. For loan and EMI collections, the threshold is now ₹5 lakh per transaction, doubling the earlier ₹2 lakh cap, with a daily maximum of ₹10 lakh.

Enhancing Purchase Power

Jewellery purchases are also affected, with the per-transaction limit now at ₹2 lakh, facilitating larger spending power in this sector. Term deposits have seen their ceiling rise from ₹2 lakh to ₹5 lakh, underscoring NPCI's intent to support more significant transactions across various financial activities.

The Path Ahead

As digital payments continue to evolve, the integration of EMIs via UPI represents a promising leap forward. By offering more flexible payment solutions, this initiative is expected to drive higher consumer engagement and broaden the appeal of digital transactions. As these features roll out, the future of UPI looks increasingly promising, cementing its role as a vital component of India's financial infrastructure.

For those interested in exploring the potential of QR codes in facilitating these transactions, a QR code generator can be an essential tool to create custom codes for seamless payment experiences.