UPI for NRIs: What it means for India and Indians abroad

What exactly has NPCI allowed on UPI?

On 10 January, India’s retail payments umbrella body NPCI issued a circular that paved the way for wider adoption of homegrown payments platform UPI. So far, only Indian phone numbers were allowed on UPI, leaving out non-resident bank accounts linked to their phone numbers abroad. In the first phase, phone numbers from 10 countries including Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the US, Saudi Arabia, United Arab Emirates, and the UK have been allowed to be used on UPI. NPCI said it could extend this to other nations as well.

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How will it benefit Indians abroad?

Once the systems are in place by 30 April, non-resident Indians will be able to transact using UPI, irrespective of whether they are in India or abroad. To use UPI, non-residents need to have either a non-resident external (NRE) account or a non-resident ordinary (NRO) account in India. It would, of course, be more useful when account holders visit India, given the scale of UPI merchant infrastructure in India. While abroad, they can use UPI to transfer funds to families in India and use it on e-commerce portals that allow such payments.

What are the pre-requisites for this facility?

NPCI has asked banks to onboard only those accounts that meet Foreign Exchange Management Act guidelines and instructions issued by the departments of Reserve Bank of India (RBI). That apart, the remitter as well as beneficiary banks will have to ensure they comply with anti-money laundering (AML) and combating of financial terrorism (CFT) checks.

Does it help the plan to take UPI global?

NPCI has been attempting to make UPI a global phenomenon and the idea to tap NRIs is a step towards that. Experts said that 10 countries are just to begin with and the list will expand in future. NPCI has been trying to push homegrown payment systems in other countries through NPCI International Payments Ltd, a subsidiary it set up in 2020. It has already tied up with payment system operators in Nepal, UAE, France, UK and others to allow UPI usage there. There is also a plan to link UPI with Singapore’s Paynow.

How will it help the UPI ecosystem?

UPI is almost synonymous with digital payments in India, clocking over ₹12.8 trillion worth of transactions in December. After a slow start in 2016, UPI payments have grown at a rapid pace. Given there are over 13.5 million NRIs, the availability of UPI is expected to raise transaction volumes. Industry experts said that just like resident Indians do not have to pay for UPI, it will also be available to NRIs at no extra cost. That said, it might be off to a slow start as the acceptance infrastructure abroad is still being developed.

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