The Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI) has been revolutionizing the digital payments landscape in India since its launch in 2016. It is one of the most popular payment methods in the country and has brought about a sea change in how digital payments are made.
Recently, the NPCI has taken a major step to extend the reach of UPI services to Non-Resident Indians (NRIs). An operating circular was issued on 10th January 2023 allowing NRIs to use their international mobile numbers for making payments through UPI. This move is a significant milestone in promoting the usage of UPI among NRIs and will help them make payments from their Indian bank accounts to Indian merchants and peers without having to obtain an Indian number.
Previously, NRIs had to go through the sim binding process, which required them to have an Indian mobile number, in order to be able to use UPI. This restriction posed a hassle as maintaining an Indian number comes with additional costs in the form of international roaming charges and other subscriber verification formalities. The new directive thus allows NRIs to use their foreign mobile number for UPI transactions with ease.
However, there are some conditions that must be met in order to avail this facility. Member banks must ensure that only NRE or NRO accounts are allowed as per the extant Foreign Exchange Management Act (FEMA) regulations and adherence to the guidelines/instructions issued by the regulatory department of the RBI. Additionally, anti-money laundering/combating of financing of terrorism checks and compliance validation must be done by the remitter and beneficiary banks.
At present, this facility is available only for NRIs from certain countries such as Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates and United Kingdom. However, it is expected to be extended to other countries in the near future through an addendum or subsequent guidelines issued by the NPCI.
All the UPI members have been instructed to comply with the directives prescribed in the operating circular by 30th April 2023.
This move is likely to benefit both consumers and businesses alike. On the consumer side, NRIs will now be able to make payments through UPI with ease. On the business side, it will increase the number of transactions and provide an impetus to digital payments among the NRI community.
Overall, the move to allow NRIs to use their international mobile numbers for UPI payments is a welcome step and will go a long way in fostering the use of digital payments across the globe.