Published on: February 3, 2023

UPI for NRIs

UPI for NRIs

Why in news?  National Payments Corporation of India (NPCI) paved the way for international (phone) numbers to be able to transact using UPI


  • Union Cabinet approved an incentive scheme for the promotion of RuPay debit Cards and low-value BHIM-UPI transactions

What about international numbers?

  • Non-resident accounts such as non-resident external accounts (NRE) and non-resident ordinary accounts (NRO), having international numbers, will now be allowed into the UPI payment system.
  • The NPCI had allowed UPI transactions to and from NRO/NRE accounts linked to Indian numbers back in October 2018.

Difference between Non external accounts and  Non-resident ordinary account ?

  • NRE accounts are those used by non-residents to transfer earnings from foreign soil to India
  • NRO accounts are used to manage income earned in India by non-residents. These incomes could be rent, interest, pension, among other things.
  • At present, users from ten countries will be able to avail the facility— Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the U.S., Saudi Arabia, UAE, and the U.K.

How are payments made?

  • NRIs to use the payment method for making utility bill payments for their families (or themselves) in India
  • They can make purchases from e-commerce or online platforms and also payments to physical merchants who accept UPI QR based payments when they travel to India.

What is MDR?

  • The Merchant Discount Rate (MDR) is the charge recovered by the acquirer from the final recipient of the payment, that is, the merchant.
  • It is collected by the acquirer to compensate the varied service providers and intermediaries in the payment system.

What is the discussion on MDR?

  • Presently, there is no MDR charge levied for RuPay-based debit card and UPI transactions.
  • Stakeholders are concerned over cost recovery for the services they provide.
  • The Reserve Bank of India (RBI) and varied stakeholders expressed concerns about the potential adverse impact of the zero MDR regime on the growth of the digital payments’ ecosystem.
  • The NPCI requested the incentivisation of BHIM-UPI and RuPay debit card transactions to create “cost-effective value proposition for ecosystem stakeholders, increase merchant acceptance footprints and faster migration from cash payments to digital payments.”