NPCI allows NRIs with international numbers to use UPI

Digitalization as a wave had arrived with the gleaming promise of overcoming all kinds of barriers and cross-border limitations. As the founder of a digital platform that simplifies the facilitation of taxation compliance, I feel hopeful to witness digitalization growing its wings globally through India!

Here comes the bright announcement!

Non-resident account types like NRE/NRO with international mobile numbers will now be authorized to transact with UPI per notice by the National Payments Corporation of India (NPCI).

A reference note:

United Payments Interface (UPI) is a real-time payment system that transfers funds instantly from a mobile platform - all you need to do is create a UPI ID with a UPI-enabled bank account and use it to send/transfer money.

It is important to note that the notice is valid for NRIs from ten countries.

So, let us quickly find out about the countries!

The NPCI will allow transactions from mobile numbers having country codes of Australia, Singapore, Canada, Hong Kong, Oman, United Arab Emirates, Qatar, USA, Saudi Arabia, and the United Kingdom, along with the current domestic country code, as per an NPCI circular released on January 10, 2023.

NPCI has requested all the members to comply with this directive by April 30, 2023.

Before we talk about the benefits of this enabler, allow me to lay out the conditions that need to get abided by to onboard and transact in UPI:

1) Member banks must ensure NRE or NRO accounts are only allowed as per the extant FEMA (Foreign Exchange Management Act) regulations and adherence to the guidelines administered by the Reserve Bank of India (RBI).

2) All required anti-money laundering/ combating of financing of terrorism checks and compliance validation as per the rules have to be assured by the remitter and beneficiary banks.

Additionally, the NPCI stated that all onboarding and transaction level checks, such as cooling period and risk rules, will be applicable as per current UPI guidelines.

“This allows the diaspora to use it not just when they come to India but also when they are abroad. They can make instant transfers and use it on e-commerce portals," said Dilip Asbe, chief executive of NPCI.

"NRIs will no longer need to use their international cards while in India," said Vishwas Patel, chairman of the Payments Council of India.

Over the last couple of years, the concerned authorities witnessed customer demand in the ecosystem to allow UPI to get linked to their international numbers. Digitalisation has made the world smaller, increasing the access and spectrums of opportunities, growth, and ease of transaction. Let us apprehend the dramatically wide range of promising benefits the announcement brings.

1) This advancement will help ease the transfer of funds across borders, especially for families with one or more kids studying in one of the ten countries listed above. It is getting estimated that 1.8 million Indians will be spending US $85 billion on education overseas by 2024, according to a RedSeer report.

2) If you have members of your family living abroad, sending and receiving gifts and money will now be hassle-free. Indians living overseas will now be able to rejoice in a seamless payment journey along with instant transactions and unmatched convenience

3) When UPI travels to merchants in the country of their residence, the NRIs could start making instant transfers. They will only have to link their NRE and NRO accounts connected to their international SIM to UPI, and they will be able to utilize it like any other Indian UPI user for merchant payment.

4) Taking the above benefit forward, local Indian businesses will also acquire growth because of the comfort of transfer across ten countries via UPI. Think globally and act globally seem to be coming through beautifully! Remittances across borders will get more effortless and cheaper due to the UPI ecosystem.

The announcement by the NPCI to make the UPI enabler available to international sims of NRE/NRO account holders is a reckoning force for the possibilities of digitalization. It is an emphatic initiative for broadening the scope of digital payments and anchors the RBI's journey towards flourishing digital payments. The announcement is a beacon of flexibility and convenience with global visions and rooted ideas.

Reminder:

All member banks must follow the directives by April 30.