Indian diaspora could help UPI expand globally
What's the story
The National Payments Corporation of India (NPCI), the body behind India's popular mobile payments system, is eyeing global expansion. The move comes as part of a strategy to leverage India's massive overseas diaspora to make UPI a go-to cross-border payment solution. Dilip Asbe, CEO of NPCI, said they could enter 15-20 markets in the next decade with this approach.
Market discussions
Ongoing talks with Japan, Malaysia, and Bahrain
NPCI is already in talks with countries like Japan, Malaysia, and Bahrain for its global expansion.
However, Asbe clarified that the final decision would depend on these nations' governments and central banks due to geopolitical and regulatory implications.
The move comes as part of NPCI's larger plan to make India self-sufficient not just in domestic payments but also in cross-border transactions.
Payment revolution
UPI's success story in India
UPI, the world's largest real-time payment system by transaction volume, has revolutionized payments in India.
It lets users transfer money instantly between bank accounts using their phones, bypassing card networks for many transactions.
Now, NPCI wants to replicate this success globally by integrating UPI with foreign payment systems.
The initial focus will be on countries with large Indian communities that contribute to the world's biggest remittance flows.
Remittance focus
Focus on remittance markets
NPCI's strategy is mainly focused on India's 35 million-strong diaspora, which sent home over $155 billion in remittances in the last fiscal year. This is the largest inflow globally.
Overseas Indians have also helped boost India's foreign-exchange reserves during market stress through special deposit schemes.
Asbe said, "The diaspora is going to increase, travel is going to increase, the trade is going to increase."
Regulatory changes
Potential impact of transaction fees on expansion
The overseas expansion comes as UPI's domestic business model is changing.
India's lower house of Parliament recently passed a bill allowing banks and other payment providers to charge fees on UPI transactions.
However, NPCI has not yet decided on any charges. An NPCI spokesperson declined to comment on the matter.
International presence
Current status of UPI abroad
The expansion will build on UPI's presence in nine countries, including Singapore, France, and the UAE.
Currently, person-to-person remittances are enabled for Singapore and Nepal, while inward remittances are enabled from Greece.
Established by the Reserve Bank of India (RBI) and banks, NPCI also runs the RuPay card network as a domestic alternative to Visa Inc. and Mastercard Inc., expanding its global footprint further.