Good news for millions of UPI (unified payments interface) users is that most mainstream payment apps have been enabled for global transactions. UPI payment rails for QR scan-and-pay are in place in six countries. But do not leave your cards at home just yet. While govt and National Payments Corporation of India (NPCI) have done their job, the acceptance network is still being rolled out and will pick up substantially when one of the players in the payment system starts championing global payments, just like fintechs did for UPI.
Countries where UPI works
NPCI has partnered with local networks in Singapore, UAE, Sri Lanka, Mauritius, and Bhutan to accept QR code payments. In France, you can book your visit to Eiffel Tower by scanning a QR code on the booking website. While rails for QR code payment are in place, only a few places are accepting them now. However, the number of shops accepting them is gradually picking up.
Enabling foreign payments
NIPL (NPCI’s international arm) validates all types of QRs based on its arrangement with the global partner. In addition, the app provider must also provide an option for users to enable international transactions within the app.
Banks Play A Role
Banks must enable international UPI transactions by adding required countries and currencies in their banking systems.
What You Need To Do
Customers can check if an option for international payments is available on their UPI app. They can enable the option to perform international transactions. BHIM, PhonePe, Google Pay and Paytm are live for international transactions.
Exchange rate calculation
Exchange rate is calculated based on rates offered by partner banks. The FX rates and their equivalent currency value are displayed while making payment for transparency so that the customer is aware of the exact amount that will be debited. Going by a transaction shared by a user on social media, the markup over the interbank wholesale rate was nearly 3.5% for a $5 transaction in Singapore.
Finding UPI-friendly shops
The only way for a customer to find out which shops accept UPI is to look out for the UPI/BHIM logo at merchant outlet/website. There is no centralised database of the number of international outlets that accept UPI.
Banks will report transaction
Banks are required to provide reporting as per regulatory guidelines. These transactions form part of the annual limits under Reserve Bank of India’s liberalised remittance scheme, which allows an individual to send the equivalent of up to $250,000 annually. Most of these are done straight through banking APIs (application programming interface that allows bank software to talk to other systems).
Tax is a grey zone
Banks are still awaiting clear guidelines from govt on whether tax collected at source (TCS) will apply to UPI transactions abroad. They say these transactions are subject to regulations and they will impose TCS if directed to do so.
UPI for online transfers?
NPCI’s partnership with Singapore’s Pay Now also facilitates online remittances. To initiate a foreign outward remittance, users must access their bank’s net banking or mobile banking platform and input the recipient’s Singapore mobile number or VPA proxy. Four Indian banks – ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India – participate in the outward remittance programme. Account holders of six Indian participating banks – Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank and SBI – can receive inward remittance through this programme. At the Singapore end, customers of DBS and Liquid Group can participate.
