NPCI International Payments Limited (NIPL) has recently signed an MoU with Western Union to enable real-time bank account payouts in India. NIPL, the international payments arm of the National Payments Corporation of India (NPCI), was launched last year with the aim of exporting NPCI’s indigenously developed payments and technological offerings like RuPay and UPI to overseas markets. In an interview, Ritesh Shukla, CEO, NIPL talks about creating new offerings and solutions for Indians to remit money abroad. Edited excerpt:
Can you tell us in detail how this would work?
Our partnership with Western Union and other players is to provide the best cross-border remittance experience to over 30 million Indians living outside India. Currently, this experience is very fragmented for consumers as it requires incremental work.
This partnership will allow users of Western Union as well as non-users to send money in India in a simple manner using the Unified Payment Interface (UPI) ID of the receiver. The sender can only enter the UPI ID of the receiver on the channel enabled by Western Union. Our tie-up with Western Union will be based on UPI’s robust and innovative infrastructure that will enable users in India to receive real-time international money transfers to their bank accounts for a better, faster and safer customer experience. Indian expatriates or Persons of Indian Origin (PIOs) residing across the world will be able to send money to their friends and relatives through Western Union and UPI integrated channels using UPI ID. All eligible UPI members will be enabled for the bank service.
Will the charges be involved?
Fees/fees in cross-border transactions are levied by the remittance service provider in the overseas market and these charges are generally based on market dynamics and available channels. Our endeavor will be to work with Western Union to optimize costs, while ensuring a superior customer experience. We will work to make tariffs sustainable and more affordable in the long run.
When is this service likely to be operational?
We are targeting to go live with the service by the second quarter of next year. With this service lakhs of Indian citizens will get the benefit of getting money from abroad uninterrupted.
Are you also looking at creating a solution for customers to send money overseas?
We are working on a solution under the guidance of Reserve Bank of India (RBI) to enable Indians to remit money outside India. Our solution will serve multiple use cases in retail payments for individuals who wish to send money to their family and friends abroad, pay fees for education, or for any other purpose permitted by RBI.
A recent study showed that Indians paid 26,300 crore in foreign exchange charges in 2020. Do you think this figure will come down with the introduction of real-time bank account payment service by NIPL?
We are aware of the current challenges in the cross-border remittance domain, including fees, fragmented user experiences, lack of transparency and long turnaround timelines. We are working closely with key stakeholders such as governments, regulators, fintech companies, service providers, exchange houses and national switches to co-create market-specific solutions.
Since each geographic region has a specific need, payment solutions must be tailored to meet the needs and preferences of the market.
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