WO2025094185A1 - Method and system enabling instalment payments on a financial transaction device - Google Patents

Abstract

The present disclosure relates to a method and system of authorizing payment transactions via a embedded module in a bank application installed on an electronic device on a debit cards, wherein the payments are converted to EMIs (equated monthly instalments) at the POS terminal. The embedded module in the bank application integrated with a switch network, is installed in an electronic device (205), such as a mobile phone or tablet. The embedded module checks the customer eligibility for availing EMI on their debit cards (215), provides EMI options, tenures and interest rate (225); on selection of a preferred tenure generates a one-time EMI PIN for operating the debit card of the user (235); which is active until successful usage or until time-out. The said embedded module communicates the purchase amount to be converted to EMI with the chosen tenure and interest rate (240), that is automatically deducted from customer's linked bank on a specified date every month until the agreed tenure ends.

Description

METHOD AND SYSTEM ENABLING INSTALMENT PAYMENTS ON A FINANCIAL TRANSACTION DEVICE

FIELD OF INVENTION

[0001] This following disclosure relates to the field of e-commerce and financial transactions. More specifically, the present disclosure relates to a method and system of authorizing debit card payment transactions via an embedded module within a bank application on a financial transaction device, wherein the payments are converted to equated monthly instalments (EMI).

BACKGROUND OF THE INVENTION

[0002] EMI (equated Monthly Installments) is a financial service that can be enabled in a debit card for debit cardholders to convert their high-value purchases into equated monthly installments over a specified tenure at any point of sale (POS). This feature enables the customers to manage their expenses and split the cost of a purchase into manageable monthly payments, usually with interest or processing fees involved. This is a convenient option for those who primarily use debit cards for their monetary transactions and who prefer not to pay the full amount upfront but rather choose to spread their payments over a period of time.

[0003] However, there are several drawbacks to the existing processing system. Not all purchases are eligible for EMI. Typically, high-value transactions meet the criteria, and further checking needs to be done to verify if the purchase qualifies for EMI. Moreover, not all banks or stores provide EMI, especially on debit card purchase. An eligibility criterion for EMI by a particular bank is often decided by the option EMI split, cart/purchase value of the item and even then, only select pre-approved customers are considered eligible for this. Moreover, not all POS machines offer the EMI split option, and the availability of this feature depends on the capabilities and integrations of the particular POS machine and the financial services it connects to.

[0004] The customers are often required to contact the bank each time they intend to make a debit card EMI transaction just to check their eligibility. This process becomes even more frustrating as the final approved limit is only disclosed during the transaction itself, resulting in a less-than-ideal customer experience. Such uncertainty could potentially deter customers from completing their purchase, impacting overall satisfaction.

[0005] Once the eligibility criteria have been met, the debit card holder will then select the desired product and inquire with bank (or the merchant) about the available EMI plans, including the tenure and associated interest rates. The bank offers different EMI tenures (e.g., 3 months, 6 months, 12 months, etc.) and corresponding interest rates. The card holder selects the EMI plan that suits best in terms of monthly payment affordability and overall interest cost. Once the full purchase amount is authorized on the debit card by the selected store/merchant, the amount is converted to EMI with the chosen tenure and interest rate, wherein the EMI amount is automatically deducted from customer’s linked bank on a specified date every month until the agreed tenure ends.

[0006] It is therefore understood that existing debit card EMIs offer limited coverage by the linked banks on credit products, which in turn results in low adoption rates among both customers and merchants for availing EMIs through debit cards. Moreover, the EMI option for debit cards can be availed by the pre-approved customers only at the point of sale (POS), which involves multiple checks with the linked banks and merchant stores. Hence, due to low awareness and a tedious process, adoption rates for Debit card EMIs have remained extremely low, which is not favored by merchants and customers.

[0007] The POS-based payments currently available to customers, offer payment flexibility, PIN authentication, and instant approval. However, this method requires the merchants to have the EMI (Equated Monthly Installment) conversion feature which is a financial service that allows the customer to convert a high value purchase, typical with a credit/debit card into smaller fixed monthly payments. This feature is commonly offered by banks and financial institutions to make it easier for the consumer to afford expensive items without having to pay for them in one lump sum amount. However, not all POS machines have this feature, thus making it even more cumbersome to avail the offer.

[0008] It is crucial to emphasize that not all POS machines have the capability to support the creation and maintenance of platform and network designed for offering, delivering, selling, and procuring EMI services, though EMI conversion feature is readily available. This limitation can create additional complexity and hurdles for customers looking to take advantage of the EMI offer. Moreover, the debit card holders availing the EMIs are always required to perform all these steps at the merchant's point of sale (POS) terminal. Stated otherwise, in the typical debit card transaction process, the customer initiates the transaction by swiping their card. Following this, they are presented with the option to choose an EMI tenure, select preferred interest rates, and tailor the transaction to their financial needs. Once they have finalized these details, the crucial security step of entering their standard personal identification number (PIN) is required. This PIN entry serves as a means to confirm their identity and safeguard against unauthorized use of the card. Only after successfully entering the PIN, the transaction proceeds to its final authorization stage, ensuring a secure and validated EMI transaction.

[0009] US6064987A discloses a central controller that receives a purchase price and a financial account identifier from a POS terminal. The financial account identifier specifies a financial account, such as a credit card account. The central controller, in turn, generates one or more instalment plan identifiers defining instalment plans for payment of the purchase price . The instalment plan identifiers are transmitted to the POS terminal. A purchaser at the POS terminal selects whether he would like to pay for his purchase in instalments and, if so, using which instalment plan. The POS terminal generates a selection signal indicative of whether to accept any of the instalment plans, and transmits the selection signal to the central controller. The central controller receives the selection signal. If the selection signal indicates acceptance of any instalment plan, use of the accepted instalment plan for the financial account is authorized. Thereafter, bills are generated which reflect instalment charges to be paid.

[0010] US20090281944 discloses a method for generating a personal identification number (PIN) child for use in performing a debit payment transaction with a merchant entity. A payment processing platform receives a user selection of a financial institution made via a merchant payment page and directs the user to authenticate a user identity with the financial institution. The payment processing platform receives a user selection of a core account held with the financial institution, such that the core account provides financial backing for the PIN debit child product. Advantageously, the method provides the ability to make PIN debit transaction on the Internet. [0011] Therefore, US6064987A discusses the involvement of the POS terminal in generating the instalment plans and does not discuss the same in link with a debit card. According to US20090281944, the invention does not discuss the provision of equated monthly instalments on the debit card transaction that had taken place.

[0012] Several products exist that replaces the physical POS machine with a POS application, thereby eliminating the need for the physical. Despite this, debit card users are still required to go through the lengthy transactional processes within the POS app. Moreover, not all POS terminal support EMI payments, thus reducing the purchasing power of a user. Hence, there is a demand for technology that can fully replace the POS machine and allow users to complete all of the EMI tenure section and other tasks on a banking application that can be installed in an electronic device such as the users’ mobile phones or computers.

[0013] The current invention therefore, presents a method for instalment payments at any point of sale (POS) terminal, highlighting the need for technology that can entirely replace the POS machine and enable users to manage their entire EMI tenure and other banking tasks through a dedicated application on their electronic devices like mobile phones or computers. The current innovation therefore, deals with determining a customer's eligibility and offering instalment payment alternatives (EMI) on their debit cards without the need for a point of sale terminal involvement, except, at the point of payment.

SUMMARY OF THE INVENTION

[0014] This following disclosure relates generally to the field of financial transactions. More specifically, the present disclosure relates to an embedded module within a mobile banking application installed on a user’s mobile phone or tablet that enables a debit card payment made by a customer to be quickly converted to equated monthly instalments (EMIs).

[0015] According to an aspect of the present disclosure, the embedded module integrated in the banking app enables the check of eligibility of a customer for availing EMI on a debit card. Customers initiate the process by accessing the bank application and then proceeding to check their eligibility for EMI on their Debit Card, provided by their respective banks. The embedded module within the banking app directly sends a request to activate EMI eligibility over a debit card, which then activates and displays options of EMI eligible amounts with tenures that can be availed on the debit for the customer. The customer can then select their preferred tenure and, if desired, calculate the EMI using an embedded EMI calculator. Once the customer authorizes a request for at least one selected credit eligible amount with tenure, a one-time EMI PIN valid for 30 minutes, which can be used at any point of sale (POS) terminal is generated over the electronic device. The customer then swipes his card at a POS terminal and enter the temporary one-time EMI PIN to avail EMI services on the purchase amount over the debit card. On entering the generated PIN the transaction is automatically converted into EMI payments in accordance with the chosen tenure. Behind the scenes, the embedded module performs checks based on the transaction amount and the merchant's eligibility before finalizing the transaction Moreover, once the EMI PIN has been successfully used or timed out, the PIN deactivates and can no longer be used.

[0016] Stated otherwise, the embedded module in the banking application communicates between bank app and switch, providing instructions from the application module to the switch network for providing real-time information on the card holder. Furthermore, the system also enables EMI conversion by checking the amount, merchant eligibility which happens in the backend before the transaction is processed.

OBJECTIVE OF THE INVENTION

[0017] It is the objective of the present disclosure to provide a bank application that is integrated with an embedded module which enables the customer to check their eligibility for availing equated monthly instalments on a debit card from a customer electronic device such as a mobile phone or tablet.

[0018] It is another objective of the present disclosure wherein the embedded module within the bank application provides total instalments payments amounts and tenure information options, based on debit card information, to the customer on their electronic device.

[0019] It is another objective of the present disclosure wherein the embedded module within the bank application to enable the customer to select the tenure of their choice on their electronic device. [0020] It is another objective of the present disclosure wherein the embedded module within the bank application generates a temporary one-time PIN (Personal Identification Number) for the customer debit card on selection of an acceptable eligible amount and tenure, which remains valid until successful operation of the PIN or until time-out.

[0021] It is yet another objective of the present disclosure wherein the embedded module within the bank application initiates the processing of the selected eligible EMI amount with tenures, when the debit card is swiped at any POS terminal, thus eliminating the need for linked bank and merchant information.

[0022] It is yet another objective of the present disclosure wherein the embedded module within the bank application helps to reduce the time taken for processing the equated monthly instalments on the debit card transaction at a POS terminal during the purchase of a product.

BRIEF DESCRIPTION OF THE DRAWINGS

[0023] It is to be noted that the appended drawings illustrate only a typical embodiment of this disclosure and are therefore not to be considered for limiting its scope, for the disclosure may admit to other equally effective embodiments.

[0024] The features and advantages of the present disclosure will become more apparent from the following detailed description along with the accompanying figures, which form a part of this application.

Fig. 1 illustrates a process flow chart related to prior art method for activating equated monthly instalment payments (EMIs) on a customer debit card.

Fig.2 illustrates a process flowchart in accordance with the present disclosure.

Fig.3a, 3b illustrates exemplary screenshots that illustrate front end journey of the present disclosure in a user mobile device.

Fig.4 illustrates a block diagram related to activating equated monthly instalment payments (EMIs) on a customer debit card post successful usage. DETAILED DESCRIPTION OF THE INVENTION

[0025] The following is a description of a preferred embodiment in the present disclosure depicted in the accompanying drawings. However, it may be understood by a person having ordinary skill in the art that the present disclosure may be practised without these specific details. The subject matter of the present disclosure will be more clearly understood from the following description of the embodiments thereof, given by way of example only with reference to the accompanying drawings, which are not drawn to scale.

[0026] The term ‘CBS’ refers to core banking system, which acts as the back-end system that processes daily banking transactions and posts updates to accounts and other financial records. The term ‘Switch’ refers to debit card network switch which dynamically identifies the acquirer bank (associated with that merchant) and the issuing bank of that specific request through BIN allotment and then permits the transaction to happen securely, wherein BIN stands for the "Bank Identification Number." It is the first six digits of a credit card or debit card number and is used to identify the issuing bank or financial institution. The term EMI refers to “ Equated Monthly Instalments” which is a fixed amount of money paid by a borrower to a lender at a specified date each calendar month. POS stands for "Point of Sale” and refers to the location or system where a customer makes a payment for products or services at a retail store, restaurant, or any other business, wherein they can range from traditional cash registers to modem computer-based systems with advanced features. The term “embedded module” and “module” have been used interchangeably here.

[0027] This following disclosure relates generally to the field of financial transactions, wherein the disclosure relates more specifically to a method and system of authorizing payments as equated monthly instalments (EMIs) on a debit card payment, from a customer’s electronic device such as a mobile phone or tablet.

[0028] It is acknowledged that a large number of people do not use credit cards. The majority of those in this category have never applied for credit cards since they are either ineligible or they do not currently use credit cards. The majority of customers who only use debit cards have monthly incomes between Rs.25,000 and Rs.70, 000. These users are salaried or working-class individuals, and moreover they have only a basic understanding of working credit cards. Moreover, the increased usage of UPI (Unified Payment Interface) may render debit cards obsolete, but the feature of EMIs on debit cards, promotes the continued frequent use of debit cards.

[0029] One of the key challenges faced by many customers are their heavy reliance on high-interest payday loans to finance essential expenses for purchasing consumer goods like large electronic appliances or covering urgent medical expenses. These loans, laden with exorbitant interest rates, exacerbate the financial strain on individuals. Moreover, failure to repay these loans further deteriorates their credit scores, particularly their CIBIL scores, impacting their financial scoring.

[0030] Another significant issue is the inadequate coverage of credit products offered by banks. While there is a high penetration of Debit Cards within this demographic, credit card adoption remains notably low. These customers frequently utilize debit cards for point-of-sale (POS) transactions, cash withdrawals, and online purchases. However, due to the absence of a credit card, banks are unable to extend lending options for Equated Monthly Instalments (EMIs) to these individuals, limiting their financial opportunities. A significant portion of these customers is unaware of their eligibility for EMI options on their debit cards, which, in turn, hinders banks from extending credit to them.

[0031] Furthermore, there is a low level of adoption by both customers and merchants regarding EMI options linked to debit cards. Only a select few banks offer EMI alternatives on debit cards. Even when available, customers must specifically request this option during the point of sale, involving multiple verification processes with both the bank and the merchant. Unfortunately, due to limited awareness and the arduous nature of this procedure, the adoption rate of EMI options on debit cards remains exceedingly low, and it is generally not favoured by either merchants or customers. This lack of adoption further compounds the challenges faced by end customers in effectively managing their finances and accessing necessary credit facilities.

[0032] Fig. 1 illustrates an existing process (100) for availing EMI in a debit card issued to a customer. The customer initiates the journey by sending a text message on their electronic devices (such as a mobile phone or tablet) to check their eligibility for availing EMIs on a debit card transaction (105). If the customer is not eligible, they are notified on the electronic device, regarding the same and cannot avail EMIs on their transactions (1 0). However, if the bank deems the transaction eligible (110) for EMI, the customer is notified (115 ) regarding their eligibility, without information on applicable limit for the EMI and tenures, from their respective banks.

[0033] Referring back to Fig. l, it is noted that, if deemed eligible, the customer must ascertain if the intended merchant accepts payments (120) through Debit Card EMI and whether their point of sale (POS) machine is compatible with this payment mode. If the intended merchant or the POS terminal does not support Debit EMI, the transaction does not proceed further. Rather, the customer will have to check on other merchants/vendors with POS machines that accept the EMI on their debit cards (155).

[0034] Coming back to Fig. 1, if the POS machine used by the merchant supports EMI on debit cards (125), the customer proceeds by selecting (130) the desired tenure for the EMI directly from the POS machine and then enters their standard personal identification number (PIN) ( 135)on their debit card. The final checkpoint in this process is verifying if the transaction amount falls within the predetermined limit set by the customer bank in the backend(140); and should it meet this criterion, the transaction is successfully completed(145).

[0035] Therefore, the current solution available in the market for utilizing Debit Card EMI is burdened with several challenges and inefficiencies, resulting in a less than optimal user experience. Primarily, there exist numerous breakpoints and dependencies associated with POS machines and a notable information gap between customers and merchants. Customers lack crucial information regarding their eligibility for Debit Card EMI, making it difficult for them to make informed purchasing decisions. Furthermore, even after inquiring with the bank about their eligibility, customers remain unaware of the specific amount they are eligible for, introducing significant uncertainty into their purchase process. Additionally, merchants are limited by the requirement for specific types of POS machines to process Debit Card EMI transactions, disadvantaging smaller and newer businesses. Even if customers successfully navigate the eligibility checks and the merchant possesses the necessary POS capabilities, the entire process takes an excessive amount of time, often exceeding 60 minutes. This prolonged process involves multiple verifications among banks, customers, and merchant POS systems, ultimately leading to a subpar customer experience exacerbated by the lack of information regarding interest rates. Consequently, this cumbersome and protracted existing process has resulted in a notably low adoption rate of Debit Card EMI, even among eligible customers, causing substantial revenue loss for both banks and merchants alike. A more streamlined and user-friendly solution is imperative to enhance the Debit Card EMI experience and drive greater adoption in the market.

[0036] Fig.2 discloses an embedded module integrated with a mobile banking application and can be installed in an electronic device (200), such as a mobile phone or a tablet carried by a customer. Embedding a module in a banking app typically involves integrating a specific feature or functionality seamlessly into the existing application. The embedded module in the application assists the banking application in conducting the check of a customer regarding their eligibility for availing EMIs on their debit cards. According to Fig.2, the EMI in a debit card issued to a customer and eligibility check of the customer can hence, be determined by the customer alone.

[0037] According to Fig.2, the banking application integrated with the embedded module is initially installed (205) in an electronic device comprising a processor and memory instructions, carried by the customer, wherein the said device is already linked to a financial institution (otherwise, bank) of the customer, too. The customer initially launches the bank application that subsist the embedded module, opens it (210) and selects the EMI on Debit Card screen to check eligibility for EMI on linked debit card(215) . If the banking application deems the customer debit card is not eligible, a request is sent via the bank application for enabling (250) EMI on the debit card. The embedded module communicates between the bank app and switch network thereby providing real-time information on the debit card holder.

[0038] If the customer is deemed eligible (220) for Debit Card EMI, the embedded module displays to the customer (225) various payment and tenure options associated with the total transaction amount on the linked mobile phone or tablet. At this point, the customer has the flexibility to choose the tenure (230) that best aligns with their preferences and financial capabilities. Hence the module enables EMI conversion of a debt card transaction by checking the amount, merchant eligibility which happens in the backend before transaction is processed.

[0039] Referring back to Fig.2, there is also provision for consumers to leverage an EMI calculator, coupled with the supplied rate of interest, empowering them to accurately compute the EMI corresponding to their selected tenure. The embedded module communicates with a switch network provides real-time information to the customer (255) regarding their debit card, such as account details and financial eligibility. This approach ensures transparency and enables informed decision-making, allowing customers to tailor their EMI plan according to their individual needs and budgetary constraints. After the customer selects their preferred tenure, the embedded module further communicates to switch to generate a temporary onetime EMI personal identification number (PIN) (235) for the debit card. This unique PIN remains valid for at least a time period of 30 minutes wherein, the temporary PIN can be inputted at any point of sale (POS) terminal.

[0040] According to Fig.2, on entering the temporary PIN instead of the standard PIN when the debit card is swiped or used at any POS terminal, the transaction amount is automatically converted to the selected EMI payments in accordance with the chosen tenure (240). Crucially, backend systems conduct checks based on the transaction amount and merchant eligibility before processing the transaction, ensuring a seamless conversion to EMI. The module conducts backend checks on the transaction amounts, merchant eligibility (260) before, the processing of the transaction. This streamlined process allows customers to independently check the eligibility of their debit cards and select payment options and tenures on their personal electronic devices, eliminating the need for reliance on the merchant's point of sale (POS) or the banking application. It enables the conversion of transaction payments into EMI transactions directly at any point of sale terminal.

[0041] The proposed embedded module is directly integrated with the banking application and communicates via switch network to enable the customer to determine eligibility and tenures alone without multiple verifications among banks, customers, and merchant POS systems. During purchases of high-value products, upon request by the customer, the embedded module provides instructions to the switch to generate a temporary PIN by providing real-time information on the debit card identifier. The generated EMI PIN which is temporary, is then relayed back to the customer via the installed banking application or a progressive web application (PWA). At the check-out point, when the customer swipes his or her debit card at the POS terminal, the generated temporary PIN is entered instead of the standard PIN at the POS terminal for the product purchased. Entering the temporary PIN rather than the standard PIN, convert the payment to be paid into the selected EMI amounts and tenures. Furthermore, this capability can be seamlessly executed on any POS system and does not rely on the presence of POS machines specifically equipped with the Debit EMI feature. Moreover, this functionality is not contingent on the type of POS machine in use, thus making it universally accessible.

[0042] As the embedded module has already communicated details of the selected eligibility amount and tenure by the customer, along with interest rate, validity checks including checks for restricted MCC (Merchant Category Code) categories are conducted before authorizing the entire transaction. Stated otherwise, the integrated module controls the information flow for the transaction allowing the same to be converted into EMI channel and then to CBS (core banking solutions). Moreover, once the temporary EMI PIN is successfully utilized or a timeout of the same occurs, the module deactivates the temporary EMI PIN successfully from the customer debit card.

[0043] Fig.3a illustrates screenshots illustrating the front-end journey of the present disclosure in a user mobile device wherein navigating the EMI on a banking application comprising an embedded module to check eligibility and select appropriate eligible amount and tenure, along with interest rates lies with the customer. Fig.3b illustrates screenshots of an embedded EMI calculator in the banking application that customers can leverage, to enable them to accurately compute the EMI corresponding to their selected tenure.

[0044] Fig.4 illustrates a flow chart of the present disclosure post successful usage or time out of the generated temporary EMI PIN. The proposed module embedded within the bank application is shown below wherein then banking app can be downloaded on an electronic device such as a mobile phone or tablet carried by the customer. According to Fig.4 the customer opens the bank application and then chooses the acceptable EMI on Debit Card screen in the electronic device. Since the switch network and the embedded module within the bank application are integrated, if a customer qualifies for an EMI on their debit card, the banking application will send instructions via the system, which will then enable to create a temporary EMI PIN number for the customer's debit card, which is then relayed back to the bank application/PWA. At the check-out point, the customer swipes his or her debit card at the POS terminal. If the temporary EMI PIN is entered, the entered amount of the purchase passes through the EMI channels and gets converted to EMIs wherein validity checks on the tenure amount, restricted MCC (merchant category code) categories thereby authorising only eligible transactions have already been conducted by the banking application. Post successful usage of the temporary EMI PIN, the same is de-activated from the debit card. Moreover, if regular PIN had been entered initially, the purchase amount would go through regular channels.

[0045] Fig.4 illustrates how the proposed embedded module integrated within the banking application when installed on the customer mobile phone or tablet, makes the eligibility check on EMI for debit card and deactivation post successful usage of the temporary EMI PIN. The customer selects the EMI on debit card option in the bank application and selects range, tenure to generate the EMI PIN.

[0046] The embedded module in the banking app communicates between the banking application and the switch network to gather real time information on the debit card holder, before instructing the switch network to generate a temporary EMI PIN. The temporary EMI PIN is then communicated back to the customer via the banking application. When the debit card with the temporary EMI PIN is swiped at a POS terminal and enters the said PIN, the switch network checks the PIN as to whether it is the standard PIN or the temporary PIN generated by the module.

[0047] According to Fig.4, if the entered PIN is the standard PIN number for the respective debit card, the transaction proceeds to flow through regular channels to core banking solutions (CBS). However, if the entered PIN was the temporary PIN, the embedded module enables the conversion of the transaction amount into EMIs at the POS terminal allowing the customers to convert their purchases into manageable monthly instalments/ loan payments, making it easier forthem to afford high-value items or services. Moreover, the module checks the amount and confirms that restricted MCC categories can authorise the eligible transactions. Furthermore, post successful usage or time out, the system deactivates the temporary EMI PIN.

[0048] The embedded module is integrated in a bank application wherein the module communicates via a switch network and is installed in a electronic device that is carried by the customer, wherein the device can be a mobile phone or a tablet. The module embedded in the bank application is linked with the customer bank server, which is also linked to the customer debit card thus enabling the customer to view and access information regarding the eligibility for EMIs on the account of the customer. Furthermore, the embedded module retrieves information on the POS terminal at the merchant store, regarding merchant eligibility and authorisation of the eligible transactions.

[0049] The proposed invention makes the whole process completely self-run by the customer, without the need for a conversation with bank partners and checking for eligible POS machines at the merchant. It eliminates the requirement for a communication with bank partners and a check to see if the merchant has any acceptable POS machines, allowing the client to manage the entire process themselves. This makes transactions very easy for clients, helps banks dramatically increase their loan book coverage with "Existing to bank" (ETB) customers, and significantly boosts revenues for merchants. The transaction time is now less than 5 minutes than compared to 60 minutes earlier.

[0050] The proposed disclosure will bring advantages to all parties involved by streamlining operations within the system securely and in accordance with regulations. This includes a significant improvement in transaction speed by 90% by reducing the time from 60 minutes in the old process to 5 minutes in the new process, a 50% reduction in interest rates for customers from 30% in payday loans to 15% in EMIs, and an almost tenfold expansion in the loan coverage of banks for their existing customers.

[0051] Existing process in banks provide very limited coverage for ETB customer via Debit card EMI. Moreover, the process of Debit EMI was considered to be very complex and non-transparent, resulting in a numbers of customers refusing to avail this facility. Furthermore, merchants lose out on sales to Debit card customers, where the customer either settles for lower price purchase, or doesn’t even up transacting. If the customer decides to avail the facility, the multiple back and forth process for both Debit card EMIs eligible and non-eligible customers results in very high TAT (turn around time). Furthermore, the merchants have to be equipped with multiple POS machines thereby paying a high percentage of commission to POS providers. The customer on the other hand is unclear on their eligibility and limit of EMI on their debit card, and hence very rarely avail this facility. Instead, due to the lack of transparency, the customer ends up taking high interest payday or personal loans, which further stresses them, wherein non-payment further deteriorates their CIBIL scores.

[0052] However, the proposed disclosure benefits all the stakeholders involved in a transaction. The proposed disclosure provides increased coverage to the bank by providing Immediate loan book expansion for ETB customers, who were currently not taking credit from the bank. Moreover, there is simplicity in the proposed process as flow is simpler resulting in customer delight. The merchants are assured an increase in sales as more customers become eligible for EMI transaction. This further results in saving of time and costs leading to faster sales and improved margins, because of faster process. Moreover, there is no revenue sharing with POS providers, resulting in more savings. Similarly, the customers experience a smooth and transparent process, and enjoy a much lower interest rates in EMI compared to personal/payday loans.

[0053] Although numerous characteristics and advantages together with details and features have been listed in the present description of the invention, the description is provided as an example fulfilment of the invention. Without departing from the principles of the invention, there may be changes in the details, in accordance with most widely understood meanings of the concepts and definitions used in claims.

Claims

WE CLAIM

1. A method of processing a payment transaction from a debit card, wherein the transaction is converted to equated monthly instalments (EMI) through an embedded module in a bank application in a linked electronic device, comprising steps of: a) receiving and verifying a request from a user to check eligibility for EMI (215), for processing the payment transaction on the debit card, via the embedded module in the bank application on the electronic device; b) generating and displaying, a plurality of eligible payment options and tenures in instalments and an embedded calculator (225), on the electronic device; c) receiving authorization from the user to select and verify an eligible payment option and tenure that is available on the said debit card via the electronic device (230); d) generating and communicating a temporary personal identification number (PIN) for the debit card via the embedded module in the bank application for activating the selected instalment option and tenure by the user (235); wherein, the temporary PIN is employed as a standard PIN to render a payment transaction to a vendor on the debit card at a point of service (POS) terminal; and wherein the payment transaction is initiated as equated monthly instalments (EMI) from a core account on successful operation of the temporary PIN at the terminal (240).

2. The method as claimed in claim 1 wherein the temporary PIN is deactivated after being used one-time in a payment transaction or until period of time-out.

3. The method as claimed in claim 1 wherein the time-out of the temporary PIN is up to a period of 30 minutes.

4. The method as claimed in claim 1, wherein the linked electronic device is a mobile phone or a tablet.

5. A system for processing a payment transaction from a debit card as claimed in claim 1; the system comprises a embedded module in a bank application installed in an electronic device comprising a processor and memory instructions, when, executed by the processor causes the embedded module in the bank application to: a) receive real time information on the debit card holder to verify eligibility for EMI (255); b) generate plurality of eligible payment options and tenures; c) receive a user authorization to select and verify an eligible payment option and tenure; and d) generate a temporary personal identification number (PIN) for the debit card; to render a payment transaction to a vendor via the debit card at a point of service (POS) terminal; and to initiate equated monthly instalments (EMI) from the account linked to the debit card.

6. The system as claimed in claim 5, wherein the embedded module communicates between the bank server, a POS terminal, electronic linked device via switch network (260).