Payment for goods and services in equated monthly installment (EMI) using credit cards at point-of-sale (PoS) is gradually becoming popular in India.
Currently being used for high-value services, including educational institutions, the scheme is expected to be implemented by travel and insurance sectors too, as reported by The Hindu.
The service aims to enable customers to afford expensive goods or services, for which a lump sum payment can’t be made due to financial constraints.
Credila Financial Services country head Prashant Bhonsle said, "However, this mode of payment does have its own limitations, especially when compared with traditional education loan either from bank or NBFC (non-banking finance company)."
Some time ago, the Reserve Bank of India (RBI) had imposed ban on EMI at PoS as some vendors offered zero per cent interest EMI schemes for their products, which was considered misleading.
Following this ban, the banks are joining hands with organizations delivering high value services, to boost their credit card business.