UPI to Soon Allow EMI Payments: How NPCI’s Next Move Will Transform Digital Transactions

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Authored by: Sachin Sharma
Updated: NewsPoint | 3 Oct 2025, 1:42 pm
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The Unified Payments Interface (UPI) has revolutionised digital payments in India, offering a seamless way to transfer money instantly. From bill payments to shopping, UPI has emerged as the most widely used payment method in the country. Now, the National Payments Corporation of India ( NPCI ) is preparing for the next big step: enabling users to convert their UPI transactions into EMIs. This new feature could redefine how Indians make high-value purchases and access credit.


NPCI’s Next Big Push for UPI

After successfully integrating RuPay credit cards and credit lines with UPI, NPCI is working with fintech firms to bring an EMI conversion feature. Once live, it will allow users to split their UPI transactions into monthly installments directly at the time of payment. The feature will mirror the existing model of card-based point-of-sale (PoS) transactions, where customers can instantly convert purchases into EMIs at the terminal.

Why It Matters

The move is significant as UPI continues to expand its ecosystem. With RuPay credit cards on UPI already gaining traction, the EMI feature would strengthen UPI’s role beyond simple fund transfers. It aligns with India’s increasing demand for credit and digital finance, especially as consumers seek flexible payment options for big-ticket purchases.


Banks and Fintechs on Board

Several banks are already collaborating with fintech firms like Navi and Paytm to develop credit-linked offerings for UPI users. Rajiv Naresh, CEO of Navi, confirmed that while the EMI feature is not yet active, the rollout is imminent. He explained that the next phase will enable customers to split payments into EMIs while scanning a QR code, provided certain criteria are met.

Revenue Opportunities for NPCI and Fintechs

Industry insiders believe the EMI feature could generate a new revenue stream. A Gurugram-based fintech founder revealed that NPCI plans to charge an interchange fee of about 1.5% on credit lines accessed via UPI. This fee would benefit both the payment network and its banking partners while providing users with instant access to credit. PayU CEO Anirban Mukherjee also highlighted the potential of instant credit on UPI, emphasising its role in boosting consumer spending.


UPI Transaction Limit Enhancements

Alongside the EMI rollout, NPCI has revised transaction limits across various categories, allowing higher-value payments:

  • Investments & Insurance: ₹5 lakh per transaction (up from ₹2 lakh), with a daily limit of ₹10 lakh.

  • Government e-Marketplace & Tax Payments: ₹5 lakh per transaction (up from ₹1 lakh).

  • Travel Bookings: ₹5 lakh per transaction, with a daily cap of ₹10 lakh.


  • Credit Card Bill Payments: Up to ₹5 lakh per transaction, with a daily ceiling of ₹6 lakh.

  • Loan & EMI Collections: ₹5 lakh per transaction, with a maximum of ₹10 lakh per day.

  • Jewellery Purchases: ₹2 lakh per transaction, doubled from the earlier ₹1 lakh cap.

  • Term Deposits: Increased from ₹2 lakh to ₹5 lakh per transaction.

    • Expanding Financial Inclusion

    By adding EMI options, NPCI is not just focusing on urban customers but also opening doors for wider financial inclusion. The feature will enable people in semi-urban and rural areas to access structured credit easily without needing a credit card. It could prove especially beneficial for students, young professionals, and first-time borrowers.


    UPI as India’s Credit Gateway

    With these upgrades, UPI is moving beyond its original role of instant payments to becoming a gateway for credit. By merging affordability with convenience, EMI-enabled UPI transactions could encourage more users to adopt digital finance. This will also help banks and fintech companies grow their credit portfolios.

    Challenges Ahead

    Despite the promise, there are challenges to address. Ensuring secure transactions, managing default risks, and building user awareness will be crucial. Moreover, seamless integration across different banks and payment platforms will decide how quickly the feature gains mass adoption.

    Conclusion

    The upcoming EMI feature on UPI represents a major step in India’s digital payment journey. By offering flexibility in payments, enhancing transaction limits, and expanding credit access, NPCI is positioning UPI as more than just a payment tool—it is becoming a comprehensive financial ecosystem. As banks, fintechs, and regulators work together, this initiative could reshape how Indians manage both payments and credit in the digital era.


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