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Unified Payments Interface goes international

July 20, 2023

Unified Payments Interface goes international
The Unified Payments Interface (UPI) can soon be used in France. Indians travelling to these countries can make rupee payments using the UPI. Ajay Ramanathan examines the advantages of using UPI and to what extent tourists and businessmen will favour using this mode over credit cards.

International acceptance of the UPI can happen only if the payment operator in the home country has an arrangement with a similar payment operator in the overseas country. The National Payments Corporation of India (NPCI) has recently set up connectivity with Lyra of France. This is similar to the linkage between the NPCI and Singapore’s PayNow that had been set up earlier this year. 
 
Within India, the chain of UPI transactions runs from the payer’s bank to the NPCI switch, and then to the payee’s bank, which could belong to an individual or a merchant. In Singapore, the route would include PayNow for UPI payments to work. Unlike domestic UPI transactions, cross-border settlements will not be real-time.
 
For UPI transactions in Singapore, DBS provides an exchange rate to NPCI. NPCI adds a markup to the rate decided in consultation with the NPCI committee (all leading banks of India are members). The rate and the markup are shown to the customer, and the transaction goes through only when the customer consents. The sending bank credits the total rupee amount (foreign currency*forex rate + markup) to NPCI’s settlement bank.
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