The National Payment Council of India (NPCI) is planning to allow inward international payments using the Unified Payment Interface (UPI). Currently, these transactions are done using Immediate Payment Services (IMPS) or National Electronic Fund Transfer (NEFT).
According to a report by Economic Times, each Virtual Payments Address (VPA) is connected to an underlying bank account that can be used to settle inward international remittance.
One of the advantages of using UPI is that it doesn’t require account details or IFSC codes, hence making transactions easier. Once implemented, players such as Western Union will become new users of UPI.
UPI has been gaining popularity as one of the most preferred digital modes to transfer money. In February, the total number of transactions through UPI were 171.4 million, amounting to Rs 19,126 crores. In total, 5.8 percent of all the UPI transactions for the month of February were processed by BHIM, accounting for 21 percent of the total amount transacted. During the same period, 16 percent of the total UPI transactions were done through PhonePe (owned by Flipkart).
On the other hand, Paytm accounted for 40 percent of the transactions. Newer players such as Google Tez and Whatsapp Payment are also using UPI. Google Tez had reported 140 million transactions for a period of two months, (October and November 2017) by 12 million users.
Digital payments in India
According to RBI, the digital transactions reached 1.11 billion in January. This was an increase of 4.73 percent from 1.06 billion in December last year. According to BCG-Google Research, the digital transactions in India will hit USD 100 billion mark by 2020. Recently, NPCI made it compulsory for every UPI application to have the facility to scan Bharat QR codes and also respond to merchants’ payment requests. All banks have been asked to act on the mandate by April 16, 2018 to ensure interoperability.