Internationalization
Around 777 million Indian consumers shop across the border in 2021.
To make ease of payment, NPCI International Payments Limited (NIPL) signed memorandum of understanding (MoU) with UK based PPRO Financial on 17 November 2021 to expand the acceptance of UPI into foreign markets especially in China and United States which accounts for half of all international transaction coming from India.[1]
On 26 January 2022, UK based fintech startup Transact365 enabled UPI for global merchants with real time currency conversion facility that will help them do business in India independent of local presence.[2]
As per NPCI and RBI mandate, banks, payment service providers (PSPs) and third-party application providers (TPAPs) in India must enable international acceptance through UPI from 30 September 2022.[3]
With the release of Payments Vision 2025 document on 17 June 2022, RBI will push for internationalization of UPI with nations using United States dollar, Pound sterling and Euro under bilateral treaties.[4][5]
Ministry of External Affairs (MEA) also actively pushing for internationalization of UPI due to geopolitical concerns.
But several countries including Canada are reluctant to accept UPI due to push back from American firms.
MEA is looking for Central Bank to Central Bank transfer using UPI as the pipeline and a collaborative effort if the countries have a similar system like UPI.[6] On 12 October 2022, India offered UPI and related technologies to Commonwealth of Nations.[7]
On 7 February 2023, PhonePe announced extending support of UPI for international payments in UAE, Singapore, Mauritius, Nepal and Bhutan.
Users will be able to pay in international currency directly from Indian bank accounts.[8]
NIPL signed a definitive agreement with PPRO Financial on 27 April 2023 that will enable acceptance of UPI among international payment service providers (PSPs) and global merchant acquirers.[9]
References:
[1] Shukla, Saloni (17 November 2021). "NPCI takes UPI global, ties up with leading payments provider PPRO". The Economic Times. Retrieved 18 November 2021.
[2] Transact365 Launches Seamless Cross Border Payments in India". Financial IT. 26 January 2022. Retrieved 2 February 2022.
[3] Surabhi (13 April 2022). "NPCI to players: Ensure international acceptance of UPI by Sept 30". BusinessLine. Retrieved 16 April 2022.
[4] "RBI payment vision 2025 document will make India a powerhouse of payments". The Hindu. 19 June 2022. ISSN 0971-751X. Retrieved 20 June 2022.
[5] "Payments Vision 2025" (PDF). Reserve Bank of India. 17 June 2022. Retrieved 20 June 2022.
[6]J, Anand; Sharma, Sandhya (18 October 2022). "Geopolitics is driving UPI's bid to go global. Here are the game plan and the challenges". The Economic Times. Retrieved 18 October 2022.
[7] "'Potentially transformational': Commonwealth Secy Gen welcomes India's UPI sharing offer". The Economic Times. 28 October 2022. Retrieved 28 October 2022.
[8] Singh, Manish (7 February 2023). "PhonePe taps cross-border UPI payments in revenue push". TechCrunch. Retrieved 8 February 2023.
[9] Sengar, Namit Singh (27 April 2023). "From Local To Global: UPI Opens Doors To International Shopping For Indian Buyers". News18. Retrieved 28 April 2023.