EMIs (Equated Monthly Instalments)

Equated Monthly Installment (EMI) is a structured repayment mechanism that enables users to repay their credit card transactions in fixed monthly amounts. An EMI includes the principal and interest, spread over a defined tenure. EMI functionality is a powerful tool for increasing transaction affordability, user flexibility, and customer engagement

Falcon provides a modular and configurable EMI infrastructure for card issuers, fintechs, and financial platforms to launch and manage flexible installment-based repayment options.

Key Features

• Flexible Tenure Options: Choose from various repayment periods to suit user preferences and financial capabilities.​
• Custom Interest Rate: Set interest rates based on user profiles, credit scores, or promotional campaigns.​
• Generate Real-time EMI Plans: Generate and offer EMI plans instantly at the point of sale or during billing cycles.​
• Seamless Integration: Integrate EMI functionalities into existing platforms using Falcon's robust APIs or low-code solutions.

EMI Models Supported

Transaction-to-EMI (TTE)

Convert eligible transactions into EMI through two broad flows:

• At Purchase Time (POS/ECOM): The full transaction is processed and flagged for EMI at the time of purchase.
• Post Purchase: Users can convert eligible past transactions into EMI via:
  • Mobile app or web portal
  • Contact center or issuer-initiated outreach

EMI Plan Configuration

Each EMI plan is customizable to meet issuer-specific business, compliance, and risk requirements. Falcon enables issuers to define:

📦 Plan Parameters

• Interest Rate: Fixed or dynamic based on user profile, tenure, or amount.
• Tenure Options: Supported durations (e.g., 3, 6, 9, 12, 18 months).
• Minimum/Maximum Amounts: EMI eligibility thresholds per tenure.
• Processing Fee: Flat, percentage-based, or hybrid with min/max limits.
• Start and End Dates: Active periods with timezone handling.
• User Segments: EMI plans can be restricted by user profile (e.g., credit score, card type).

🚫 Transaction Eligibility

Filter out ineligible transactions based on:

• Merchant category code (MCC)
• Transaction types (e.g., ATM withdrawals, fuel, cash advances)
• Transaction age (in days)
• Billed vs. unbilled status
• Credit limit checks

EMI Lifecycle Management

The following is the EMI lifecycle management:

✅ EMI Creation

• Triggered by the user or issuer after transaction settlement.
• Only eligible transactions are allowed.
• The system validates credit limits, computes the EMI schedule, and adjusts the balance.

📆 EMI Start Cycle

Configurable to begin from the subsequent statement cycle.

🔄 EMI Cancellation and Pre-Closure

• User-Initiated or Issuer-Forced: Includes cancellations due to returns, card closures, or upgrades.
• Charges: Configurable pre-closure fees or waiver policies.
• Cooling Periods: Refund of processing fees or penalty waivers within a defined number of days.

📊 EMI Calculation

Falcon uses a reducing balance formula:

EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]

Where:

• P: Principal
• R: Monthly interest rate
• N: Tenure in months

This ensures accuracy in interest distribution and repayment schedules. The EMI simulator allows users to preview monthly payments and total interest before committing.

User Experience

Falcon supports seamless end-user experiences with:

• EMI calculator UI
• Simulation before conversion
• Mobile and web-based conversion
• Pre-closure quotes
• Detailed EMI statements

Statement and Reporting

This is how statements and reports are managed at Falcon:

💳 Credit Card Statement Integration

Each EMI deduction includes:

• Tenure, interest, principal, and loan reference
• Breakdown in transaction and summary sections
• Inclusion of EMI due to Minimum Amount Due (MAD)

📁 Reports and Reconciliation

• EMI summary reports
• GL-impact reporting (principal, interest, processing fees, reversals)
• Support for NPA and delinquency scenarios

Compliance and Governance

Falcon aligns with regulatory guidance requiring:

• Transparency in principal, interest, and discounts
• Explicit disclosure of no-cost EMI conditions
• Accurate EMI breakup in billing statements