UPI for NRIs: A game-changing proposition for international remittances

The ease of use and acceptance of the innovative platform has changed the way Indians make payments and transfer funds. However, Non-Resident Indians (NRIs) did not have access to this service till now.

game changer: NPCI’s (National Payments Corporation of India) notification allowing NRIs to link their international mobile numbers with UPI for payments and fund transfers is a step in the right direction with potentially game changing results. India is the largest International Remittance (IR) destination in the world. For the first time, a single country, India, is on track to receive over $100 billion in annual remittances in 2022, up from $89 billion in 2021, according to the World Bank. Looking at IR trends, UPI is in good shape. To replicate domestic success by tapping the demand for international payments. With their request to let UPI now becoming a reality, NRIs would be keen to make the most of this platform for seamless and secure transactions.

To begin with, NPCI has allowed NRIs from 10 countries- Singapore, Australia, Canada, Hong Kong, Oman, Qatar, US, Saudi Arabia, UAE and United Kingdom to avail UPI services to send and receive money. given. Interestingly, the US and UAE markets are the biggest remittances to India.

NRIs can use the service only if their domestic bank accounts such as Non-Resident External (NRE) and Non-Resident Ordinary (NRO) are linked to their international phone numbers. NRE bank account allows NRIs to park their foreign earnings in the country. An NRO bank account helps them manage their income earned in India. These incomes include rent, dividend, pension, interest etc.

Benefits galore: With an estimated 18 million expats, Indians constitute the largest diaspora group in the world. For the large working population and students abroad, enabling UPI for international transactions has significant benefits.

Security: UPI uses Virtual ID for transactions, making it more secure as bank account details are not shared. Moreover, UPI’s stringent guidelines to follow for anti-money laundering and combating the financing of terrorism are a great safety net.

Fast Service: Being a digital and phone-based platform, UPI facilitates faster remittances than other options being used currently. This is especially beneficial during emergency situations like medical situations, payment of student fees, etc. NRIs can also pay domestic utility bills instantly using their UPI ID.

reduced cost: According to the World Bank’s Remittance Price Worldwide Database, the average cost of sending $200 to any South Asian country including India is 4.1%. UPI enables easy, fast and affordable remittance services.

Low Dependency: With UPI, one can make payments and transfer funds directly to the intended beneficiary without the need to route them through bank accounts of friends or relatives.

Simplified Payment: All NRIs need to do is link their NRE and NRO accounts with their international SIM to UPI. Once the Virtual ID is created, one can use it like a regular Indian UPI user to make merchant or P2P payments.

Social Ideals: NRIs get an opportunity to showcase UPI as a world class product to their peers abroad. The ability to say it is good social currency. UPI as a payment instrument is an intrinsic part of the daily life of common Indians today. It fits seamlessly into their everyday lives as a way to send money home. For domestic banks, including payments banks, this is an opportunity to mobilize NRI deposits and enable seamless digital transactions. With significant rural penetration, we expect the new UPI initiative to further deepen the use of digital payments in India.

For India, UPI is a story of the country’s robust fintech ecosystem, driven by a desire to innovate for the greater good and make a bigger impact with the customer at the centre.

Ashish Ahuja is COO at Fino Payments Bank