Founder at Skillymilli
NRIs Rejoice: Government Approves New UPI Policy for International Transactions with Incentives Worth ₹2,600 Crore!
The National Payments Corporation of India (NPCI) has enabled participation in the Universal Payment Interface (UPI) system for non-resident Indians (NRIs). In an effort to boost the usage of RuPay debit cards and low-value BHIM-UPI transactions, the Union Cabinet authorized a 2,600 crore incentive plan.
NRIs having non-resident external (NRE) or non-resident ordinary (NRO) accounts that are connected to overseas phone numbers will now be able to utilize UPI to make payments in India, according to NPCI. Currently, citizens of ten nations, including Singapore, Australia, Canada, Hong Kong, the United States, and the United Kingdom, will have access to the new system.
Deep Agrawal, Head of Payments at PhonePe, said that the new advancement would enable NRIs to utilise UPI for bill payment, e-commerce platform purchases, and transactions with physical merchants in India. Changes in infrastructure and technology will be required to facilitate these payments, he said.
There has been disagreement about the Merchant Discount Rate (MDR), which is the cost merchants pay to reimburse payment system service providers. Currently, there is no MDR fee assessed for RuPay debit card and UPI transactions. Concerns have been expressed by the RBI and other stakeholders over the possible effect of zero MDR on the expansion of the digital payments ecosystem. The NPCI has suggested that BHIM-UPI and RuPay debit card transactions be incentivized in order to provide a cost-effective value proposition for stakeholders and encourage retailer adoption.
UPI has enabled 6,779.6 million transactions totaling 10.95 lakh crore as per the most recent count. During the fiscal year 2021-22, BHIM-UPI comprised 59.74% of all digital payments. According to NPCI statistics, UPI has enabled around 3,192.70 million transactions worth 5.52 lakh crore during the month of January.