FRANCE ADOPTS INDIAS UPI

 

Latest Context

The Indian Government has been trying to expand its digital payment systems such as Unified Payments Interface (UPI) to other countries for enabling cross-border transactions in order to lower the cost of fund transfers and remittance payments. Recently, the PM of India stated that India’s UPI will be used in France.                                                          

Implications: It will facilitate Indian tourists to make payments in rupees in France.

Unified Payments Interface (UPI): It was launched in 2016 by the National Payments Corporation of India (NPCI). It facilitates the linking of various banking accounts into a single mobile application.

• The interface facilitates inter-bank peer-to-peer and person-to-merchant transactions. It is used on Mobile devices to instantly transfer funds between two bank Accounts.
• It is regulated by RBI and works instantly by transferring funds between two bank accounts on a mobile platform

Scope of UPI determined by NPCI

• NPCI issued a circular which makes the way for adopting the homegrown payment platform UPI on a wider level.
• As of now, Indian phone numbers were allowed on UPI, leaving out non-resident bank accounts linked to their phone numbers abroad.
• In the first instance, phone numbers from 10 countries comprising Hong Kong, Oman, Qatar, the US, Saudi Arabia, Singapore, Australia, Canada, United Arab Emirates, and the UK have been allowed to be used on UPI.
• NPCI said it could extend this to other nations as well

National Payments Corporation of India: It was developed by the Indian Banks’ Association (IBA) and RBI in order to create a robust payment and settlement infrastructure in India under the Payment and Settlement Systems Act, 2007. For operating retail payments and settlement systems in India, it is an umbrella organization. 

• NPCI is the nodal agency for UPI. According to it, only those accounts complying with the Foreign Exchange Management Act (FEMA) can use this facility

Significance of international use of UPI:

• It makes faster and cheaper remittance services.
• It uses virtual ID for a transaction which makes it more secure because bank account details are not shared.
• It bypasses intermediaries and directly transfers funds to beneficiaries.

Steps Taken to Promote the Global Usage of UPI

• NPCI permitted NRIs in 10 countries including Singapore, Australia, Canada, Oman, Qatar etc. to use the UPI platform from their international mobile numbers.
• RBI announced the extension of UPI to allow visitors from G20 countries to use it to make merchant payments when they are in India

 

 

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