Experts feel that India’s UPI is one of the most successful electronic payments systems globally. Therefore, the extension of its services to citizens of G20 countries will foster India’s relationship with these nations for future collaborations.
The Reserve Bank of India has proposed to allow foreign tourists to make merchant payments while in India via Unified Payments Interface (UPI).
UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood.
Experts feel that India’s UPI is one of the most successful electronic payments systems globally. Therefore, the extension of its services to citizens of G20 countries will foster India’s relationship with these nations for future collaborations.
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Rajsri Rengan, head of banking and payments, India and Philippines, FIS, said that this is a great move to scale up the use of digital payments in India as well as improve their payment experience.
It has been decided to allow access to UPI to foreign nationals and NRIs visiting India. To start with, this facility is extended to travellers from the G-20 countries at select international airports for their merchant payments (P2M) while they are in the country.
RBI said that going forward, this will be enabled across all entry points in the country.
Swapnil Jambhale, co-founder and COO, Safexpay, said that the move comes at a strategic point after announcing the UPI facility for NRI with NRE and NRO accounts linked with their mobile numbers.
“This step will turn out to strengthen India’s position as the payments leader in the global market. In-bound travellers from G20 countries will be able to experience UPI payments while transacting with different merchants. Once these travellers arrive in India, they will be able to avail the facility by complying with the necessary procedure set by RBI at the airports and select entry points,” Jambhale added.
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How will it work?
- Banks/Non-banks permitted to issue Prepaid Payment Instruments (PPIs) can issue INR denominated full-KYC PPIs to foreign nationals NRIs visiting India
- Such PPIs can also be issued in co-branding arrangement with entities authorised to deal in Foreign Exchange under FEMA
- The PPIs shall be issued after physical verification of Passport and Visa of the customers at the point of issuance
- The PPI issuers shall ensure that such information and record thereof are maintained with them
- The PPIs can be issued in the form of wallets linked to UPI and can be used for merchant payments (P2M) only
- Loading / Reloading of such PPIs shall be against receipt of foreign exchange by cash or through any payment instrument
- The conversion to Indian Rupee shall be carried out only by entities authorised to deal in Foreign Exchange under FEMA
- The amount outstanding at any point of time in such PPIs shall not exceed the limit applicable on full-KYC PPIs
- The unutilised balances in such PPIs can be encashed in foreign currency or transferred ‘back to source’ (payment source from where the PPI was loaded), in compliance with foreign exchange regulations
What is G20?
The Group of 20 (G20) is an intergovernmental forum of the world’s major developed and developing economies.
It comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US, and the European Union (EU).
Meanwhile, payment transactions through UPI rose 1.3 per cent on-month to a high of nearly Rs 13 lakh crore in January 2023.
