India’s instalment culture is reshaping global checkout strategies

As Indian consumers increasingly adopt instalment payments as a routine habit, global merchants must adapt their checkout systems to maintain relevance and maximise conversions, reflecting a broader shift in payment behaviour driven by formal credit growth and innovative UPI integrations.

Indian shoppers have turned instalment payments into a habit, not just a fallback, and that shift is changing how global merchants need to think about checkout design. In September, Zeba Khan, who leads consumer electronics at Amazon India, said during Prime Day that at least one in five smartphone buyers used instalments, and four in five of those chose no-cost EMI, where the seller absorbs the interest. Counterpoint expects EMI and financing to account for 42% of smartphone sales in India this year, underlining how deeply embedded the model has become.

The contrast with many Western markets is striking. Buy now, pay later has become a major category globally, with Worldpay estimating that BNPL reached around $300 billion in 2025, or roughly 130 times its 2014 size. But India’s version is broader and more routine. For many buyers, instalments are not a sign that they cannot afford the purchase; they are simply the preferred way to pay, whether the item is a new phone, a household appliance or a travel booking.

That change is tied to the growth of formal credit and the way it is entering everyday spending. TransUnion CIBIL said that by March 2026, 74% of India’s 890 million credit-eligible adults had borrowed formally at some point, up from 35% in 2017. It also found that 46% of first-time borrowers began with a consumer durable loan in the first quarter of fiscal 2027. CRIF High Mark said 73% of consumer durable loans in the January-to-March 2026 quarter were below ₹25,000, while 28.5% were below ₹10,000, showing that the market is being driven by smaller-ticket purchases rather than only big, discretionary ones.

The same logic is now moving into UPI, the payments system that has become central to Indian commerce. Industry and government data show the scale: UPI had 554.9 million users by June 2026 and processed 24,161.69 crore transactions worth ₹314.23 lakh crore in fiscal 2026, according to figures cited by IBEF and Business Standard. Banks integrated with the system rose to 731 by June 2026, nearly five times the number in 2020, and UPI hit another record in August with 24.51 billion transactions. NPCI has also issued a framework to bring credit, including instalments, into regular UPI payments, with apps given until 15 December 2026 to standardise support.

For merchants selling into India, the commercial risk is not just that a customer may want to spread payments. It is that a checkout which does not offer the right local options can quietly lose the sale. The lead example imagines a buyer in Pune looking at a ₹40,000 annual plan on a global platform and leaving for a domestic rival that allows monthly payments at no extra cost. Stripe has said that when businesses offered at least one relevant payment method alongside cards, conversion rose by 7.4% on average and revenue increased by 12%. On that basis, missing local payment methods can be expensive, especially when instalments are already part of the purchase decision.

That is why payment providers are positioning cross-border tools as a way to make foreign merchants look more local at checkout. According to the company, Cashfree’s cross-border stack allows businesses outside India to accept payments from Indian customers without setting up an Indian entity, while settling funds in the merchant’s own currency. Because collection happens inside India, customers can see the kinds of options they are used to, including card EMI, no-cost EMI, cardless EMI, UPI EMI through Snapmint and three-part interest-free splits, alongside UPI, RuPay, cards and net banking. For merchants, the message is simple: in India, instalments are not an add-on. They are often part of the purchase itself.