New Delhi: From paan walas and auto rickshaw drivers to jewelry shops, the Unified Payments Interface (UPI) is now a ubiquitous payment option used by nearly everyone in India. But the central government Thursday went one step further to expand the UPI’s reach, with Prime Minister Narendra Modi announcing during a visit to France that the payment medium will soon be made available in that country.
“India and France have agreed to use UPI in France… In the coming days its (UPI) beginning will be made from the Eiffel Tower, which means that Indian tourists will now be able to make payments in Rupees, through UPI at Eiffel Tower,” Modi said at the La Seine Musicale in Paris.
Developed by the National Payments Corporation of India (NPCI) — a Reserve Bank of India-backed umbrella organisation for digital payments — UPI is a system that powers multiple bank accounts into a single mobile application, according to NPCI’s website.
It combines several banking features — including peer-to-peer (individual-to-individual) and peer-to-merchant payments (individual-to-merchant) — through a “single click 2 factor authentication” and allows for a single mobile application to access multiple bank accounts, thus reducing the dependence on cash.
It was launched on 11 April 2016, by Raghuram Rajan, the then governor of the Reserve Bank of India (RBI), with 21 member banks. There are currently 458 participating banks on the platform, according to NPCI’s report for June 2023 on UPI.
That month, a total of 9.335 billion transactions were recorded using UPI, accounting for a total of Rs. 14.75 lakh crore, the NPCI reported.
Speaking at the CII Partnership Summit 2023 in March, Anurag Jain, secretary for the Department for Promotion of Industry and Internal Trade (DPIIT), said that India’s real-time digital transactions are more than the US, Europe and China combined.
ThePrint looks at the growth of the UPI system and countries where you can use the payment interface.
Also Read: UPI linked to Singapore’s PayNow, bilateral money transfer now ‘safer, instant & cost-effective’
Making UPI global
On 4 September 2020, the NPCI had issued a circular mandating the UPI ecosystem in India to implement international merchant payments acceptance — a system to enable transactions with other countries. The deadline, according to the circular, was 31 December, 2021, but was extended further to 30 September last year.
In February, PhonePe became the first UPI application to integrate and launch UPI International, a feature that allows cross-border payments using Indian bank accounts across five countries — Bhutan, Singapore, Nepal, UAE and Mauritius.
Currently, 16 Indian banks — among them Bank of Baroda, Union Bank of India, Punjab National Bank, Canara Bank, Bank of India and IndusInd Bank Limited — support UPI International payments on PhonePe.
PayTM has also announced its intention of rolling out UPI International, according to media reports.
On 10 January, the NPCI announced that non-resident individuals with bank accounts in India will be able to use UPI using their local phone numbers from 10 countries — Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, UAE and the United Kingdom. The requirement, according to the circular, was having a non-resident bank account in India that could be linked to the individual’s local (international) phone number.
Apart from these measures, the RBI also announced on 21 February that foreigners travelling to India from G20 countries would be allowed to make local payments using UPI. For this, travellers at “select international airports” — such as Bengaluru, Mumbai and New Delhi — would be eligible to be issued ‘Prepaid Payment Instruments’ (PPI) wallets linked to UPI for payments to merchant outlets, the RBI press release said.
The G20 is an intergovernmental forum comprising Australia, Canada, Saudi Arabia, the US, India, Russia, South Africa, China, Turkey, Argentina, Brazil, Mexico, France, Germany, the United Kingdom, Italy, Indonesia, Japan, the Republic of Korea and the European Union.
Peer-to-Peer, Peer-to-Merchant International Payments
The two common transactions via UPI are peer-to-peer and peer-to-merchant. Sources from the banking industry told ThePrint that currently peer-to-merchant payments are accepted internationally in UAE, Bhutan and Singapore. In case of peer-to-peer payments, foreign inward (Indians receiving money) and foreign outward (Indians sending money abroad) remittances are allowed only to Singapore, where it was operationalised on 21 February, through a partnership between UPI and PayNow — a near-instant real-time payments system developed by the Association of Banks in Singapore.
Currently, RBI allows six banks in India to receive remittances from Singapore — Axis Bank, DBS Bank India, ICICI Bank, Indian Overseas Bank, Indian Bank and the State Bank of India. Meanwhile, four banks — ICICI Bank, Indian Bank, Indian Overseas Bank and the State Bank of India — can send money to a Singaporean account.
The transaction limit is Rs. 60,000/day and peer-to-peer remittances can only be made for “maintenance of relatives abroad” and “gift”.
Apart from the UPI-PayNow linkage for peer-to-peer transactions, merchants in Singapore can also opt-in to enable UPI and RuPay acceptance at their stores using QR codes.
On 21 April last year, NPCI International Private Limited (NIPL), a wholly-owned subsidiary of NPCI, reported that UPI payments went live across the UAE through NeoPay — a payment subsidiary of the privately-owned Mashreq bank.
UPI peer-to-merchant payments were also enabled in Bhutan on 13 July, 2021. In fact, it was the first country to adopt UPI standards for its QR deployment.
Apart from these three countries, NIPL has also reportedly signed a memorandum of understanding (MoU) with the Central Bank of Oman, Netherlands-based global payments infrastructure company TerraPay, and UK-headquartered payments solution provider PayXpert. It also has signed an MoU with Liquid Group, a Singapore-based fintech company, to launch UPI payments across 10 Asian markets — Malaysia, Singapore, Thailand, Philippines, Vietnam, Cambodia, Hong Kong, Taiwan, Republic of Korea and Japan.
In October last year, NIPL signed an agreement with Worldline, a global payments provider from France, to adopt UPI payments across European markets. The first target markets for this collaboration are Switzerland and the BENELUX (Belgium- Netherlands-Luxembourg) countries.
(Edited by Uttara Ramaswamy)
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