India and France have signed an agreement to enable UPI payments in the European nation; here’s what you need to know about the deal
India and France have signed an agreement in the digital payments sector under which India’s unified payments interface (UPI) can now be used for retail payments in the European nation, thus becoming the first country in the continent to enable this.
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Here’s what you need to know about the deal:
Prime Minister Narendra Modi announced this while addressing the Indian community at the La Seine Musicale, a performing arts centre on the island of River Seine at Paris in France. In June last year, the National Payments Corporation of India’s (NPCI) international arm signed a memorandum of understanding (MoU) with France’s Lyra Network for acceptance of UPI and RuPay in the European country.
India-France UPI Agreement: What Does It Mean?
Enabling UPI payments in France has further expanded the scope of payments through UPI in foreign countries. With this, Indian tourists would now be able to make payments in France in rupee through UPI. It will be started from Eiffel Tower. It will also encourage digital payments in France, which has a low use of digital payments.
A bank official told news18.com that the deal is also expected to help save forex reserves as the retail payments through UPI in France will be made in Indian rupees.
India accounts for 40 per cent of global digital payments. In February, UPI payments were also allowed in Singapore following an agreement on cross-border connectivity between India’s UPI and Singapore PayNow. Earlier, PhonePe also enabled payments abroad and said all international merchant outlets in the UAE, Singapore, Mauritius, Nepal, and Bhutan that have a local QR code are supported.
UPI In France: How Will It Work?
Indians visiting Europe will no longer need to use credit cards or debit cards ONLY for payments. They can now, once it is operational, also use their UPI app to make their payments in France in the rupee using local QR or UPI ID.
UPI In France: Will There Be Any Markup Charges?
Usually, international payments through credit cards or debit cards attract markup charges that range between 0.99 per cent to 3.5 per cent of the payment amount, depending upon the card features.
The bank official said, “In the credit and debit cards, payments abroad are made in foreign currencies. The banks charge markup fees. Now, in the UPI’s case, since the payment, as per PM Modi’s speech, will be made in France in rupees and there is an agreement between India’s NPCI and France’s Lyra Network, the markup charges might not be there. However, it will become clear once more details come in.”
A query sent to NPCI in this regard remained unresponded till the time this report was published. The story will be updated as soon as the NPCI responds.
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The bank official, however, said, “It will be a cost-effective method as compared to the traditional method of using forex cards, credit cards, etc. The recent UPI agreement between India and Singapore in February has also enabled people to save as much as 10 per cent on their cross-border payments between the two countries.”
Currently, there are no charges levied on transactions done through UPI within India.
The homegrown NPCI, which is an initiative of the RBI and the Indian Banks’ Association, is an umbrella organisation for facilitating retail payments and settlement in India through the RuPay gateway.
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UPI is among the most successful real-time payments (RTP) systems globally, providing simplicity, safety, and security in P2P and P2M transactions in India.
