ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 19 April. Click Here for more information.
ForumIAS Answer Writing Focus Group (AWFG) for Mains 2024 commencing from 24th June 2024. The Entrance Test for the program will be held on 28th April 2024 at 9 AM. To know more about the program visit: https://forumias.com/blog/awfg2024
Source: The post is based on the article “What is the government’s new policy of UPI for NRIs?” published in The Hindu on 2nd February 2023.
What is the News?
National Payments Corporation of India(NPCI) has paved the way for international (phone) numbers to be able to transact using UPI.
Recently, the Union Cabinet approved an incentive scheme for the promotion of RuPay debit Cards and low-value BHIM-UPI transactions (person-to-merchant) in FY 2022-23.
How can NRI’s access UPI?
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.
NRE accounts are those used by non-residents to transfer earnings from foreign soil to India while 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.
Significance of this initiative: This development would allow NRIs to use the payment method for making utility bill payments for their families (or themselves) in India, make purchases from e-commerce or online platforms and make payments to physical merchants who accept UPI QR-based payments when they travel to India.
What is the discussion on 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.
Presently, there is no MDR charge levied for RuPay-based debit card and UPI transactions. Stakeholders are hence concerned over cost recovery for the services they provide.
The Reserve Bank of India(RBI) and various stakeholders expressed concerns about the potential adverse impact of the zero MDR regime on the growth of the digital payments’ ecosystem.
To address these concerns, the Government of India launched the “Incentive scheme to promote payments using RuPay cards and the Unified Payments Interface (UPI)”.
