New Delhi: Soon, Visa debit cardholders can convert their purchases from e-commerce sites to Equated Monthly Installments (EMI) as the world’s largest payments network has introduced a platform that will enable any bank to offer EMI facility to their debit cardholders for online purchases. This will work for most of the e-commerce platforms, the Times of India reported.
“There are over 2 crore unique credit cardholders, while it is estimated that around 22 crore debit cardholders are eligible for credit facilities. This increases the number of creditworthy individuals by a factor of 10,” Arvind Ronta, head of product for India and South Asia, Visa, told ToI. According to Ronta, there are 93 crore debit cards in India as against 4.5 crore credit cards. So this platform is likely to give a big boost to retail lending.
It may be noted that most of the big e-commerce websites along with banks have already been offering EMI facility for debit card purchases. But these are based on one-to-one tie-ups between banks and merchants. Now, with Visa’s latest platform in place, any bank that signs up for the service can access all the merchants that are on board.
Similarly, merchants who offer this facility can do this for debit cards of all banks that have signed up on the platform through a simple application programming interface (API) integration. This is the first time that a payments network company is providing this facility, the daily mentioned.“The credit underwriting will be done by the banks. They will determine the eligibility of the cardholder and the tenure of credit,” Ronta further added. Since all this happens within seconds, the customer will have a seamless experience while making an online purchase. This facility is available for all debit card issuers except customers of payments banks, which are barred from providing credit or overdraft facility.
Meanwhile, EMIs on a debit card will help banks increase their retail-lending portfolio without the use of additional resources for distribution.