Things To Know: How EMI Schemes On Cards Work?

Knowing about EMI Schemes on cards has become very important for business owners nowadays. Be it the credit card swipe charges, knowhow of debit card EMI, or POS options like Buy Now Pay Later, being well-informed about the fast-evolving payments landscape is a must for every seller. It doesn’t matter if you are B2B or B2C establishment, whether you run an online or offline store, or what kind of products or services you sell. The popularity of virtual payments and EMI-based payments has seeped into every possible market segment today.

Understanding EMI Schemes on Cards and POS

  1. It is a great selling strategy to offer your customers flexible EMI payment options. But what is touted as ‘zero-interest EMI’ is a cleverly disguised form of conventional EMI payment. This is because the RBI has banned the concept of 0% EMI.
  2. So for merchants to allow consumers to pay in installments, a minimal interest rate needs to be charged. Still, many businesses (especially e-commerce giants) provide so-called ‘interest-free’ installments at checkout.
  3. The trick lies in foregoing the discount that would apply to the product for a customer who pays the whole amount upfront. So the interest amount is not revealed to the consumer but is recovered by the merchant by not providing the discount, which would otherwise have been applicable for regular payment modes.
  4. As a business owner, you can be discerning about which segment of customers you wish to provide EMI facility. For instance, you can allow this for loyalty club members only, or select customers with a high-value purchase history.
  5. Since the approval of debit cards, EMI is solely based on the customer’s account balance, the chances of payment defaults are minimal.

How does Debit Card EMI work?

While installing an EDC machine earlier, all merchants would care about was to find out about the credit card swipe charges. Of course, this was way back when payments used to be either in cash or card. Today, there is an avalanche of digital payment modes, coupled with EMI schemes for customers who want to buy now and pay later. In this regard, let us understand how debit card EMI works:-

  • Debit Card EMI on Mobile is a fairly simple process. For customers who don’t own credit cards but would like to avail the ‘buy now pay later’ facility, this is a great option.
  • Unlike conventional EMIs availed via credit cards, the entire purchase amount gets debited from the customer’s account first.
  • This is to merely ascertain if his/her account has the required balance. After a pre-specified time, the amount is credited back to your account.
  • While any credit card EMI transaction is dependent on the credit limit, the debit card EMI on mobile option rests solely on your account balance.

Advantages of Investing in a POS with EMI Integration

EMI-integrated POS systems are not just beneficial for customers, but for merchants as well. It is commonplace today for business owners to provide a variety of digital payment options for customers. But to differentiate your offerings, going a step ahead with a cutting-edge POS with debit card EMI integration is highly recommended. Here are the main advantages of extending ‘pay later’ options or flexible credit facilities to your prime customers:-

  • Encourages customers to make big purchases without worrying about immediate payments
  • Eases out the sale of your high-value merchandise
  • Helps you achieve higher sales during the festive season when most customers are keen on buying more but have limited budgets
  • Increases your base of loyal customers, encouraging repeat visits and repeat sales
  • A customer-friendly payment facility helps in expanding your customer base
  • Helps brick-and-mortar stores to compete with e-commerce stores on a level playing field


Ever since the Covid-19 pandemic hit in 2020, many businesses bore the harsh brunt of lockdowns and lack of demand. To add to this pressing situation, the average consumer income plunged across most market segments. The only way to recover from this vicious cycle of dwindling incomes and business losses is by extending a well-charted EMI facility for consumers who are keen on making big purchases but cannot afford to pay all upfront. Knowledge of credit card swipe charges, buy now pay later facility, and debit card EMI can augment your sales and profitability.

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