The National Payments Corporation of India (NPCI) recently issued a circular dated 10th January 2023, allowing UPI platforms to onboard non-resident Indian accountholders (NRE/NRO accounts) from ten countries, including Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the US, Saudi Arabia, the UAE, and the UK. This move comes as a response to requests from the UPI ecosystem as well as customers to allow non-resident accounts to have the ease of use and security of money transfers through UPI.
The NPCI has asked the participating members in the UPI ecosystem to allow non-resident (NR) accounts in UPI and IMPS domestic transactions as per the extant FEMA regulation and adherence to the guidelines/instruction issued by concerned regulatory departments of RBI (Reserve Bank of India). This means that NRE and NRO account holders with international mobile numbers will be able to use UPI for international money transfers.
>So essentially NPCI has now enabled UPI platform for those Indians with an NRI type bank accounts with Indian Banks but have an international mobile number. Earlier these types of accounts were not allowed to participate in the UPI platforms as they came under the foreign remittance section and not local national money transfers within India.
This step will be benfitial for a large number of young indians who are working outside of india and send money every month to support thier fmailies, also this will vastly reduce the unnecessary and illogical fees attached to sending money through online transactions.
Furthermore, the NPCI has also asked the member banks to ensure that the transactions are only allowed as permitted under FEMA regulations, and also to adhere to the guidelines issued by the RBI’s regulatory departments from time to time regarding safeguards against anti-money laundering, terror financing, and compliance validation checks.
This new circular is expected to make international money transfers easier and more secure for non-resident Indians. With the NPCI allowing UPI transactions for non-resident bank accounts linked to mobile numbers of 10 countries, it is becoming a popular alternative payment system and is expected to comprise 8% of the country’s total GDP in 2025.
Also judging from the subject of their circular: “Crediting/Debiting Non-Resident (NR) accounts in UPI and IMPS domestic transaction” – one can conclude they are going to enable both making and accepting payments.
Comparison between UPI and Crypto
Remittance was a big use case for crypto and other Digital payments innovations as they carried substantially lesser fees than banks and other money transfer alternatives available. But none of them has been as successful and safe when compared to UPI because of a number of factors.
Cryptocurrency and UPI are two different payment systems with different advantages and disadvantages. Cryptocurrency is a digital currency that is decentralized and not controlled by a central bank. Transactions are added to the blockchain if they can be validated according to the rules stipulated by the code. Cryptocurrency is peer-to-peer and does not require a central entity to validate transactions. However, it is slow, computationally intensive, and cannot scale to meet the needs of a large population.
In comparison, UPI is an open protocol payments system that is backed by the Indian Government and is widely accepted in countries across Asia. It is secure and reliable and works well for a very large population. It is also interoperable with other technologies, allowing for the development of a larger and more useful network for financial payments.
If UPI were to get adopted worldwide, it would offer an efficient, secure, and cost-effective way to transfer money internationally. It would be more reliable and secure than using private digital payment alternatives like PayPal, Apple Pay, and Bitcoin, and it would be cheaper and easier to use than cryptocurrencies. Furthermore, UPI transactions would require strong two-factor authentication, making them more impervious to fraud than the older systems in richer countries.
UPI has several advantages over private digital payments alternatives like PayPal, Apple Pay, and Bitcoin, such as its open protocol, allowing for the development of a larger and more useful network for financial payments. This makes UPI an attractive option for international money transfers.
This news further supports UPI as an attractive option for international money transfers. According to the news, the NPCI has allowed UPI for non-resident Indians starting this April. This means that NRIs will soon be able transfer money internationally via UPI, which is cheaper and more secure than using private digital payment alternatives like PayPal, Apple Pay, and Bitcoin.
In conclusion, UPI for non-resident Indians is a secure and reliable alternative payment system for international money transfers that has advantages over private digital payment alternatives like PayPal, Apple Pay, and Bitcoin.