Globalised UPI Payment System

Globalized UPI Payment System
In This Article, ”Globalised UPI Payment System”, We Will Discuss About Globalized UPI Payment System, UPI V/S Pay Now, Key Benefits Of Globalised UPI Payment System, etc.

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Context Of Globalized UPI Payment System

In News

• On 21st February 2023, Prime Minister Narendra Modi and Prime Minister of Singapore, Lee Hsien Loong launched cross-border connectivity between the Unified Payments Interface (UPI) of India and Pay Now of Singapore.
• Singapore is among the top countries sending remittances to India, after the US, United Arab Emirates and the UK. According to data from the Reserve Bank of India (RBI), it accounted for almost 6 per cent of India’s total inward flows of $89 billion from individuals in 2021-22.

Background

• From November 2019, for merchant payments, UPI payment has already been enabled but remittance transaction is now being allowed with Singapore and other nations will follow.
• Similarly, merchant payments are enabled with UAE, Bhutan, Nepal, and Singapore and negotiations are ongoing with some other countries too. In addition to this, attempts are being made to globalise the UPI payment system.

What Will Change After UPI-Pay Now Connectivity?

• Taking a step ahead, now the banking system is not required for people-to-people transactions.
• Anyone in Singapore can transfer money to their friends and relatives in less than 1-minute through the UPI payment.

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What Is Globalized UPI Payment System?

• NPCI Is Working towards Globalizing UPI Based Payment System at war footing.
• Considering the Indian diaspora across the globe, the National Payments Corporation of India (NPCI) has recently been planning to allow NRIs from 10 countries, namely Singapore, Hong Kong, Oman, Qatar, Saudi Arabia, United Arab Emirates, USA, Australia, Canada, and the United Kingdom to digitally transfer funds using the UPI platform from their NRE/NRO accounts.
• Singapore is the first from this set of 10 countries.
• The real-time payment networking with Singapore is just the beginning of a greater disruption of the digital payment ecosystem by India.

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UPI V/S Pay Now

• In January 2023, per day 26 crore transactions were completed via UPI across the country.
• Like UPI in India, Pay Now is the fast transaction system in Singapore, by linking both, speed and cost efficiency would be ensured between the countries.
• The UPI-Pay Now linkage would enable residents of both countries to make easier, faster and more cost-efficient transfers of cross-border remittances.

Key Benefits Of Globalised UPI Payment System

• The step of linking cross-border transactions is considered beneficial for Customers, professionals, traders and entrepreneurs.
• For Example, In India, one can easily pay vegetable sellers and others in just a matter of few seconds but as it is cross-border it would take a few minutes. For security reasons, there are certain norms and procedures to be followed and hence it takes time. But indeed, it is faster than the traditional banking transaction process.
• Within India, there is 2-factor authentication, similarly, in the new international transaction system there is an “Opt-in” & “Opt-out” feature. The “Opt-in” & “Opt-out” feature allows the user to not accept the transaction and hence money can’t be transferred in a fraudulent way.

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