If their domestic bank accounts are linked to their foreign mobile numbers, the National Payments Corporation of India (NPCI) has allowed Indians living abroad to use the fast payments network UPI.
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What exactly is UPI?
- UPI (Unified Payments Interface) is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) that facilitates inter-bank transactions.
- The Reserve Bank of India regulates the interface, which works by instantly transferring funds between two bank accounts on a mobile platform.
What exactly has the NPCI permitted on UPI?
- The National Payments Corporation of India (NPCI) issued a circular that paved the way for greater adoption of the homegrown payments platform UPI.
- So far, UPI has only allowed Indian phone numbers, leaving out non-resident bank accounts linked to foreign phone numbers.
- Phone numbers from ten countries, including Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the United States, Saudi Arabia, the United Arab Emirates, and the United Kingdom, were allowed to be used on UPI in the first phase.
- According to NPCI, this could be extended to other countries as well.
How will it benefit Indians living in other countries?
- Non-resident Indians will be able to transact using UPI once the systems are in place, whether they are in India or abroad.
- Non-residents must have either a non-resident external (NRE) or a non-resident ordinary (NRO) account in India to use UPI.
- Given the size of India’s UPI merchant infrastructure, it would be more useful when account holders visited the country.
- While abroad, they can use UPI to send money to family members in India and use it on e-commerce sites that accept such payments.
What are the requirements for using this facility?
- The NPCI has directed banks to accept only accounts that comply with the Foreign Exchange Management Act guidelines and instructions issued by the Reserve Bank of India’s departments (RBI).
- Apart from that, both the remitter and the beneficiary banks must ensure that they comply with anti-money laundering (AML) and combating financial terrorism (CFT) checks.
Does it contribute to the plan to take UPI global?
- The idea to tap NRIs is a step towards NPCI’s goal of making UPI a global phenomenon.
- The initial list of ten countries will be expanded in the future.
- NPCI International Payments Ltd, a subsidiary it established in 2020, has been attempting to promote homegrown payment systems in other countries.
- It has already partnered with payment system operators in Nepal, the UAE, France, the United Kingdom, and other countries to enable UPI usage.
- There are also plans to connect UPI to Singapore’s Paynow.
What impact will it have on the UPI ecosystem?
- In India, UPI is almost synonymous with digital payments, with over 12.8 trillion in transactions in December.
- Following a slow start in 2016, UPI payments have grown rapidly. The availability of UPI is expected to increase transaction volumes, given that there are over 13.5 million NRIs.
- According to industry experts, just as resident Indians do not have to pay for UPI, NRIs will also be able to use it for free.
- However, it may be a slow start because the acceptance infrastructure abroad is still being developed.
Source: https://indianexpress.com/article/technology/nri-upi-on-international-mobile-numbers-list-of-supported-countries-8375685/