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RBI Guidelines on Unified Payment Interface for International Travelers

calendar01 Mar, 2023
timeReading Time: 6 Minutes
RBI Guidelines on Unified Payment Interface for International Travelers

In line with its efforts to further propel digital payments in India, the Reserve Bank of India or RBI recently announced the introduction of facilities which shall enable all inbound international travellers from certain jurisdictions visiting India to make digital payments Unified Payment Interface or UPI while they are in India. RBI has introduced the new policy with a view to promoting digital payments in the country and to provide a seamless digital payment experience for international travellers visiting India. In a statement released on 8 February 2023 on developmental and regulatory policies, the RBI talked about introducing this facility in India. Prior to this, non-resident Indians who had their foreign mobile phones connected to NRO or NRE accounts were given access to make payments through UPI. As per statements issued by the RBI, the facility shall be available from 21 January.

This development comes on the same day on which the linkage between the payment systems of India and Singapore, namely the UPI system of India and the PayNow from Singapore. This was done with a view to facilitating cost-efficient and faster digital transfers between the people of India and Singapore.

The UPI-PayNow linkage shall enable users of payment systems in either country to avail fast, safe, convenient, and cost-effective transactions between the two countries using the mobile apps for the respective payment systems. Funds held in e-wallets or bank accounts shall be transferred to and from India mobile number or UPI ID, or virtual payment address. Initially, Indian Overseas Bank, State Bank of India, Indian bank and ICICI Bank both outward and inward remittances, while DBS India and Axis Bank shall facilitate inward remittances. For users in Singapore, the service shall be made available through Liquid Group or DBS Singapore.

Customers of the above-mentioned participating banks can undertake cross-border remittances to Singapore using the mobile banking app or internet banking of the bank. Initially, users shall be allowed to remit up to ₹60,000 in a day. This transaction is being made, former the system calculates and displays the amount and both currencies dynamically for the user’s convenience.

This interlinkage shall be in accordance with G20’s financial goal of driving cheaper, faster and transparent cross-border payments, and this shall be a considerable milestone in the development of cross-border payments infrastructure between Singapore and India.

What is a Unified Payment Interface (UPI)?

Unified Payment Interface, or UPI, is a system of that bunches together multiple bank accounts into one mobile application. It facilitates several banking features, merchant payments and seamless fund routing, all under a common platform. To transfer money through UPI, a user is required to have an ID which is termed as the UPI ID. The Unified Payment Interface ID is a unique identification for a user’s bank account, which is used to send and receive funds from one bank to another. Users can use Unified Payment Interface without entering the receiver’s UPI ID to initiate transactions. The user is only required to select the contact number of the intended receiver from one’s phone book or enter the contact number of the receiver to send money through UPI. Unified Payment Interface PIN is a 4-digit or 6-digit personal identification number that is required to transfer money through UPI. Every account holder is provided with the option to set her UPI PIN in accordance with her convenience.

There are many benefits of transferring money through Unified Payment Interface. This is because UPI payments are typically swift and can be completed within seconds. Almost every bank has allowed UPI transactions through mobile phones. The payments that are made through UPI are entirely safe. The user only requires to have a working SIM card for her mobile phone and is also required to put in a unique MPIN every time. The UPI payment facility allows users to request money from other individuals, which is not often an option for additional payment methods. The mobile payment application also provides the facility for bill payments, which can help the user set timely reminders for bill payments and use the application to make such payments instantly. The user can also file a complaint using the mobile payment application in case if she notices any suspicious activity on her account or in case of any other trouble.

Eligibility to Avail This Facility

The RBI has made this facility available to international travellers from the G-20 countries at certain international airports. The group of 20, or G20, is an intergovernmental forum comprising of major developing and developed economies of the world. The Unified Payment Interface feature shall be made available to travellers to India from countries like Canada, France, Indonesia, Japan, Mexico, Saudi Arabia, Turkey, the United States, Argentina, Brazil, China, Germany, Italy, the Republic of Korea, Russia, South Africa and the United Kingdom. International travellers from these countries shall receive prepaid payment instrumentation or PPI wallets, which will be connected to Unified Payment Interface to be used while making purchases at many of the merchant establishments in India.

Prepaid Payment Instruments facilitate the purchase of services and goods against the value that is stored on such payment instruments. The stored values on these instruments are the value that has been paid by the holder either through cash or credit card or by debit to a bank account.

RBI Guidelines for PPIs for Non-Resident Indians or Foreign Nationals Visiting India

RBI guidelines with respect to PPIs for foreign nationals or non-resident Indians visiting India have amended the existing Master Directions on Prepaid Payment Instruments issued on 7 August 2021 by inserting paragraph 10.3 therein.

  • Banks and non-banks authorised to provide PPIs which shall be issued in rupees for Non-Resident Indians or foreign nationals visiting India, starting with travellers from G20 countries arriving at certain international airports only, including Bengaluru, New Delhi and Mumbai. Such PPIs can also be issued in association with organisations under FEMA has the license to deal in foreign exchanges.
  • PPIs shall be issued to international travellers only after the physical verification of the visa and the passport of the client and the site of issuance. According to RBI, PPI issuers shall have to ensure that such records and information are kept on file with them.
  • The PPIs to international travellers can be issued only in the form of wallets that should be linked to Unified Payment Interface and can be only used for P2M or merchant payment transactions only.
  • Loading or reloading of PPIs shall be on the receipt of foreign exchange, either in cash or through any other payment mechanism from the foreign national or NRI.
  • According to the RBI, the conversion of foreign currency to Indian Rupees shall only be carried out exclusively by firms under FEMA that are authorised to trade in foreign exchange.
  • The outstanding amount in these PPIs shall not exceed the applicable limits of the KYCs, at any time.
  • As per the RBI, any unauthorised balance such PPIs can either be sent back to the source, that is, the payment source through which the PPI was loaded or can be paid back in foreign currency in accordance with regulations pertaining to foreign exchange.

Which Are The Financial Institutions Providing This Facility?

Initially, only IDFC First Bank and ICICI Bank, along with non-banking institutions issuing PPIs, namely Transcorp International Limited and Pine Labs Private Limited, shall issue UPI-linked foreign wallets to international travellers to avail the facility of using UPI payments while travelling in India.

Where Can International Travelers Avail Of This Facility?

International travellers travelling to India can avail of this facility at international airports, including those in New Delhi, Mumbai and Bangalore, where the UPI payment option shall be available initially. It is expected that the service shall soon be expanded to additional cities, airports and other entry points to the country, which shall enable international visitors travelling in India to enjoy the convenience and benefits of QR-based UPI payments in India.

Using Unified Payment Interface with International Mobile Numbers

There are conditions for Non-Resident Indians with international mobile numbers to use UPI. NRO or NRE account holders who have international mobile numbers shall be allowed to register on the UPI platform and initiate transactions on them if the below-mentioned conditions are fulfilled by them:

  • Member banks are required to ensure that only the NRE account holders or NRO account holders meet the extant regulations of the Foreign Exchange Management Act or FEMA and adhere to guidelines and instructions of the specific regulatory departments of the Reserve Bank of India or RBI from time to time shall only be allowed to use UPI platforms with their international mobile numbers.
  • The beneficiary and the remitter banks have to ensure compliance validation in accordance with the rules and that every critical check to combat the financing of terrorism or anti-money laundering is met with.

Conclusion

The Reserve Bank of India[1], or RBI, recently announced the introduction of facilities which will enable all inbound international travellers from any of the G20 countries visiting India to make digital payments through the Unified Payments Interface while they are in India. RBI has introduced this new policy with a view to promoting digital payments in the country and to provide a seamless digital payment experience for international travellers visiting India. In a statement on developmental and regulatory policies released on 8 February 2023, the RBI talked about introducing this facility in India. Prior to this, only those Non-Resident Indians who had their foreign mobile phones connected to NRO or NRE accounts were given access to make payments through Unified Payment Interface. As per statements issued by the RBI, the facility shall be available from 21 January.

Also Read:
Overview Of Payment Gateway License In India
Guidance On NBFC Compliances As Specified By The RBI

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