India’s mobile-based payment solution – the United Payments Interface (UPI), empowers users to conduct instantaneous transactions 24/7 using a Virtual Payment Address (VPA). Launched by the National Payments Corporation of India (NPCI) in 2016, it has enjoyed a rapid upward growth trajectory for retail digital payments within India. UPI has connectivity with more than 300 banks, enabling transactions through Third-Party Application Providers (TPAPs) like Google Pay, Amazon Pay, PhonePe, and Paytm. You can find a white paper by the same authors on ‘Payment Innovation with UPI’ here.

Aspiring to place India firmly on the global digital payment landscape, the Indian government has been strategically expanding UPI’s reach beyond Indian borders. NIPL (NPCI International Payments Limited) was incorporated in April 2020 as a subsidiary of the NPCI. NIPL has been forging partnerships with several countries to expand the acceptance network. A recent outcome of this is the introduction of UPI International that will allow Indian travelers to easily make payments in select destinations abroad.

UPI International

UPI International enables QR code payments using Indian bank accounts to select merchants abroad. Currently, UPI international payments are enabled for the following countries – Bhutan, Singapore, Nepal, UAE, and Mauritius. To use this facility, international payment needs to be activated on UPI apps that support this feature, such as PhonePe, Google Pay, and Bhim UPI app.

Steps to Activate UPI International

International transactions can be activated only for bank accounts that support UPI International. Given below is the current list of banks that support UPI international payments:

• Bank of Baroda
• Union Bank of India
• Punjab National Bank
• Canara Bank
• Bank of India
• Indian Bank
• Central Bank of India
• Bank of Maharashtra
• The Federal Bank Limited
• IndusInd Bank Limited
• Karur Vysya Bank Limited
• South Indian Bank Limited
• City Union Bank Limited
• Punjab & Sind Bank
• ESAF Small Finance Bank Limited
• The Cosmos Bank

To activate UPI International, users need to go to their profile and account on the UPI app home, ‘activate’ international payment settings corresponding to the bank and enter their UPI PIN. This will activate UPI International for the next 90 days. On successful activation, users can see a UPI International ‘active’ tag in their profiles.

Making UPI International Payments

The steps to be followed are similar to regular UPI payments, but have still been listed below:

• Open the UPI app
• Tap Scan QR Code
• Scan the international merchant’s QR code
• Enter the amount in payable foreign currency (some apps will show the INR conversion)
• Select the bank account to use to pay the international merchant
• Provide consent on applicable charges
• To confirm payment, enter the UPI PIN

The debit from the bank account will be in Indian currency. It will include the foreign exchange conversion rate and applicable bank fee. UPI payments once initiated cannot be cancelled since they are direct bank-to-bank transfers.

UPI International Transaction Limit

For foreign remittances, the official limit on UPI transfers is up to INR 2,00,000 in one transfer. Note that the actual limit may be less depending on the app used to make the transfer.

Foreign Exchange Conversion Rates and Bank Fees

There are two main charges when sending money internationally with UPI.

• Transfer Fee – The transfer fee is the cost of the transaction- it depends on the amount sent and where it is going. Transfer fees may also vary depending on how the payment is made. While sometimes using a credit card to pay for the transfer can increase the fee, a wire transfer or bank account payment can keep the fee low.
• Exchange Rate Fee – For overseas payments, issuers (banks) and payment regulators (NPCI) set the foreign exchange conversion rate.

The integration of UPI International marks an important milestone and offers the advantages of seamless transactions abroad for Indian travelers without the need for physical currency or cards, quick and secure international money transfers, and lower remittance costs compared to other payment options. With more countries getting added to the acceptance network, UPI International is all set to revolutionize international payments, enhance financial inclusivity, and create a borderless financial landscape.

Lead Author

Kumar Iyer – Director, Engineering

Co-Authors

Yogesh Bindwal – Associate Architect, Fintech

Kanchan Shagalolu – Associate Architect, Fintech