The National Payments Corporation of India (NPCI) has officially kicked off pilot programs for one of its most anticipated features: Equated Monthly Installments (EMI) on UPI. This groundbreaking initiative allows customers to convert high-value transactions into easy monthly installments directly within their UPI app, a move set to democratize access to credit and revolutionize big-ticket purchases for millions of Indians.
The pilot involves several major banks, including HDFC Bank, ICICI Bank, and Axis Bank, along with leading payment apps. During this phase, select customers making purchases at participating online and offline merchants will see an option to convert their payment into 3, 6, 9, or 12-month EMIs. The entire process is seamless: the user selects the EMI tenure, authenticates the transaction with their UPI PIN, and the purchase is complete. The pre-approved credit line from their bank is used for the transaction, and the EMI plan is instantly activated. This eliminates the need for physical credit cards or lengthy loan application processes.
This development comes as the adoption of the broader “Credit Line on UPI” service is rapidly gaining momentum. Since its launch, numerous public and private sector banks have started offering pre-sanctioned credit lines to their customers, which can be linked directly to their UPI ID. This transforms UPI from a simple payment system for savings or current accounts into a powerful credit delivery platform. Users can now scan a QR code and pay using their credit line for everyday expenses, creating a flexible digital credit card experience on their phones.
The introduction of EMI functionality is the logical next step in this evolution. It targets a different use case, larger, planned purchases like electronics, home appliances, and travel bookings—which were traditionally the domain of credit cards and consumer finance companies. By making credit more accessible and the repayment process transparent and digital, UPI is poised to capture a significant share of India’s booming consumer credit market. The success of these pilots will pave the way for a full-scale public launch, further cementing UPI’s position as the backbone of India’s digital economy.
