Explained | India’s UPI push

The National Payments Corporation of India has allowed non-residents with international numbers to be on-boarded into the UPI ecosystem, while the Union Cabinet approved a Rs 2,600 crore incentive scheme to promote RuPay debit cards and low-value BHIM-UPI transactions

The story so far: On January 10, the National Payments Corporation of India (NPCI) paved the way for international (phone) numbers to be able to transact using UPI. A day later, the Union Cabinet chaired by Prime Minister Narendra Modi approved an incentive scheme for promotion of RuPay debit Cards and low-value BHIM-UPI transactions (person-to-merchant) in FY 2022-23. The scheme has an outlay of Rs 2,600 crore.

These measures could prove significant for the UPI-based payment ecosystem which has largely witnessed a sequential rise in the previous calendar year.  

In a nutshell, non-resident accounts such as non-resident external accounts (NRE) and non-resident ordinary accounts (NRO), having international numbers, will now be allowed into the UPI payment system. NPCI had allowed UPI transactions to and from NRO/NRE accounts linked to Indian numbers back in October 2018.  

NRE accounts are those used by non-residents to transfer earnings from foreign soil to India while NRO accounts are used to manage income earned in India by non-residents.  

At present, users from ten countries will be able to avail the facility— Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the United States of America, Saudi Arabia, United Arab Emirates, United Kingdom and Hong Kong. More inclusions are likely in the future.

All members of the interface, such as banks and payments platforms, have till April 30 to comply with the guidelines. 

Deep Agrawal, Head of Payments at online payment app PhonePe, told The Hindu that the development would allow NRIs to use the payment method for making utility bill payments for their families (or themselves) in India, make purchases from e-commerce or online platforms and make payments to physical merchants who accept UPI QR based payments when they travel to India.