You may soon be able to convert your UPI payments into EMIs

The National Payments Corporation of India (NPCI) is reportedly developing a new feature that will enable users to convert their Unified Payments Interface (UPI) payments into Equated Monthly Instalments (EMIs). This move is part of NPCI's strategy to boost credit products and drive the next phase of growth in retail digital payments, a report suggests. A report by the Economic Times (ET) cited sources familiar with the plan, claiming that NPCI is set to enable fintech companies to integrate an EMI payment feature that will allow customers to convert their UPI transactions into EMIs instantly. The feature is expected to help the NPCI push more credit transactions through the UPI network.

How the EMIs on UPI payments may work

As per the report, the experience would be similar to making card payments at point-of-sale (PoS) terminals, where customers can instantly convert a card swipe into EMIs on the spot.

NPCI is reportedly exploring this feature following the widespread adoption of RuPay credit cards on UPI and the introduction of credit lines on the UPI network. A few banks have already partnered with fintechs like Navi and Paytm to provide UPI users access to such credit lines.

In a statement to ET, Navi CEO Rajiv Naresh said: “Today, we are not yet live with EMI, but the next version—which NPCI has permitted via its product guidelines—will allow the consumer, at the point of scanning the QR code (subject to certain terms and conditions), to split payments into EMIs.”

However, Navi has not yet launched the feature; the Sachin Bansal-backed company is heavily investing in UPI with a clear focus on leveraging credit-based payments which is something it believes will help build sustainable business models for UPI apps.

Fintech founders argue that credit on UPI opens up revenue opportunities, unlike savings account-based transactions, where no fees can be charged to merchants due to the government’s zero-fee mandate on RuPay debit cards and UPI payments.

A Gurugram-based fintech founder told ET that NPCI has set an interchange fee of around 1.5% on UPI credit lines, making it a clear revenue channel.

Speaking with ET last week, PayU CEO Anirban Mukherjee highlighted the growing opportunity around instant credit on UPI, noting that “UPI is becoming more than just a payment method, it is evolving into a full-fledged payment system.”
Much like cards that support debit, credit, and EMI payments, UPI is expected to build its own credit ecosystem, which could extend checkout financing to millions of consumers who currently don’t own a credit card.

Today, UPI handles about 20 billion transactions each month, with an active user base of 250–300 million. To expand further and bring more types of payments onto the platform, the report also cited industry insiders, who claim that doubling down on credit is essential, a direction NPCI is actively pursuing.