India’s homegrown UPI for instant money transfer will go global soon

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India’s homegrown UPI for instant money transfer will go global soon
India is planning to expand RuPay and UPI acceptance across world destinations, where Indians travel for holidays, study or profession.Courtesy: Getty Images

National Payment Corporation of India is negotiating with banks and fintech companies in countries such as the US, the UK, Saudi Arabia, UAE and elsewhere to roll out its payment interface and RuPay card, which have already overtaken Visa and Mastercard in the domestic market within just five years of launch.

India’s National Payment Corporation of India (NPCI), which has developed and rolled out the Unified Payment Interface (UPI), which enables people to transfer money instantly from one bank to another using a mobile phone, is now taking its app to the global market. It is holding negotiations with several banks, fintech companies and umbrella payment organisations in countries with large concentration of Indian-origin people like Dubai, Abu Dhabi, Saudi Arabia, the US, the UK, France, Singapore, South Africa and several others to sign them up.

Middle East, Europe, the US may soon see UPI acceptance

A report in ET quoted the CEO of NPCI International Payments Ltd (NIPL), as saying: “We are aiming to expand RuPay and UPI acceptance across world destinations, where Indians travel for holidays, study or profession or even stay.. “We are in talks with global agencies through which we are looking to introduce RuPay and UPI to the world.”

RuPay, which has overtaken both Visa and Mastercard in India, enjoys a 60 per cent market share in the country.
RuPay, which has overtaken both Visa and Mastercard in India, enjoys a 60 per cent market share in the country.Courtesy: Getty Images

RBI action on Mastercard unlikely to impede UPI rollout in the US

RuPay, which has overtaken both Visa and Mastercard in India, enjoys a 60 per cent market share in the country. A government official said NIPL does not expect to regulatory headwinds in the US despite the recent Reserve Bank of India (RBI) order barring Mastercard from acquiring fresh customers from July 22 over its failure to store the data of Indian customers within the borders of the country.

NPCI is holding negotiations with several banks, fintech companies and umbrella payment organisations in countries with large concentration of Indian-origin people like Dubai, Abu Dhabi, Saudi Arabia, the US, the UK, France, Singapore, South Africa and several others to sign them up.

Global rollout to help ease remittance flows

India is the world’s largest receiver of remittances, especially from expatriates working in the Middle East. Last year, it received as much as $83 billion through this route. Once UPI becomes available in foreign countries, especially the oil-rich nations of the Persian Gulf, it will facilitate the flow of inward remittances as many Indians are expected to shift to this mode of transfer.

India is the world’s largest receiver of remittances. Last year, it received as much as $83 billion through this route. Once UPI becomes available in foreign countries, especially the oil-rich nations of the Persian Gulf, it will facilitate the flow of inward remittances as many Indians are expected to shift to this mode of transfer.

First time an Indian app will be challenging global leaders

This will be the first instance of an Indian fintech app directly challenging the hegemony of established Western money transfer agencies and card payment companies such as Mastercard and Visa, If the attempt is successful, it will be a huge boost for Prime Minister Narendra Modi’s attempts to make in India for the world, though technically, RuPay and UPI are not physical products.

India is the world’s largest receiver of remittances, especially from expatriates working in the Middle East.
India is the world’s largest receiver of remittances, especially from expatriates working in the Middle East.Courtesy: Getty Images

UPI already has wide acceptability among leading Indian, foreign banks

UPI, which was launched in 2016, has grown at a compounded annual growth rate (CAGR) of 285 per cent since then and touched payment volumes of $457 billion last year. Users must have a bank account with a member bank like HSBC, Citibank Retail, State Bank of India, ICICI Bank, HDFC Bank, Deutsche Bank, Bank of America, among 226 large and small Indian and foreign banks.

Unlike regular bank transfers, UPI transfers work 24x7 and, therefore, offers greater flexibility to users. At present, Bhutan is the only foreign country to adopt UPI standards for its QR code and the second country after Singapore where the UPI-BHIM is accepted at merchant locations.

UPI is very easy to use

The interface is very user-friendly. One has to download the app supporting UPI – such as Paytem, PhonePe, Google Pay, Amazon Pay, BHIM and a few others – on one’s mobile phone, which must be registered with the bank to enable verification.

Then, one has to go through the usual verification protocol of banks, which includes a one time password sent by the bank to the registered mobile phone number. The virtual payment address is created once the OTP is verified and certified to be correct.

One can begin sending funds to and receiving money from one or more bank accounts completion of the above step. The NPCI has set a transaction limit and a per-day transaction limit. At present, the UPI transfer limit per UPI transaction is just less than $1,350 per day and the number of UPI transactions is limited to 20 in most cases. However, individual member banks are free to set smaller sub-limits subject to the ceiling amount set by NPCI.

It works 24x7

Also, unlike regular bank transfers, UPI transfers work 24x7 and, therefore, offers greater flexibility to users especially in emergency situations and when time is of essence.

At present, Bhutan is the only foreign country to adopt UPI standards for its quick response (QR) code and the second country after Singapore where the UPI-BHIM is accepted at merchant locations.

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