Indians Can Now Pay with UPI in Nepal: A Landmark Achievement for Digital Payments

Delhi – Indians visiting Nepal can now enjoy the convenience and security of paying with their smartphones using the Unified Payment Interface (UPI), a popular payment system in India.

This is possible thanks to a partnership between NPCI International Payments Ltd (NIPL), the international arm of the National Payments Corporation of India (NPCI), and Fonepay Payment Service Ltd, Nepal’s largest payment network. The partnership was announced at the Global Fintech Fest 2023 in India in September last year.

UPI is a mobile-based payment system that allows users to send and receive money instantly using a virtual payment address (VPA) or a QR code. UPI is widely used in India for various purposes, such as online shopping, bill payments, money transfers, and more. UPI has over 300 million users and processes over 2 billion transactions per month in India.

With this partnership, UPI users can scan QR codes to make payments to Nepalese merchants who are part of the Fonepay network. Merchants can accept UPI payments from Indian customers without any additional integration or cost. This will benefit both the merchants and the customers, as they can enjoy a seamless and hassle-free payment experience.

“This initiative not only signifies our commitment to innovating the digital payments space but also reflects our dedication to creating new avenues for trade, strengthening the bond between the two nations,” said Ritesh Shukla, chief executive officer of NIPL.

“I am confident that this cross-border payment solution will significantly improve economic ties, commerce, and tourism between the two nations, eventually promoting economic prosperity and progress,” said Diwas Kumar, chief executive officer of Fonepay.

A boon for Indian travelers and Nepalese businesses

The UPI integration will be a boon for Indian travelers who visit Nepal for various reasons, such as tourism, pilgrimage, business, education, and medical treatment. According to a survey conducted by the Nepal Tourism Board in 2017, more than 1.2 million Indians came to Nepal by land. The survey showed that the average length of stay of Indian tourists coming overland was 5.8 days. The average expenditure per visitor was Rs 11,310.

NPCI International Payments Ltd (NIPL) and @fonepay Payment Service Ltd, have announced that UPI is now live for cross-border transactions between India and Nepal. This partnership will enable Indian consumers to make instant, secure and convenient QR code based UPI payments at… pic.twitter.com/YWjHATzxkO

— NPCI (@NPCI_NPCI) March 8, 2024

With UPI, Indian travellers can now pay for their expenses in Nepal without having to worry about currency exchange, cash availability, or card acceptance. They can simply use their UPI-enabled apps, such as Google Pay, PhonePe, or Paytm, to scan and pay at various merchant outlets in Nepal, such as hotels, restaurants, shops, and tourist attractions. They can also send and receive money from their friends and family in India using UPI.

The UPI integration will also benefit Nepalese businesses, especially those that cater to Indian customers. They can attract more Indian customers by offering them a convenient and secure payment option. They can also save on the transaction fees and currency conversion charges that they would otherwise incur if they accepted cards or other payment methods. They can also access the large and growing UPI user base in India and expand their market reach.

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A revolutionary shift in cross-border transactions

The UPI integration between India and Nepal is a revolutionary shift in cross-border transactions, as it represents the first time that UPI is being used for international payments. UPI is already available in multiple countries, such as Singapore, Canada, Oman, Saudi Arabia, and the United Arab Emirates, among others. However, these are mostly for domestic payments within those countries. The partnership between NIPL and Fonepay is the first of its kind to enable UPI payments across borders.

This partnership also showcases the potential of UPI as a global payment system that can facilitate cross-border remittances, trade, and commerce. UPI is based on the principles of interoperability, innovation, and inclusion, which make it a suitable platform for connecting different payment systems and networks across the world. UPI is also compliant with international standards and best practices for payment systems, such as the ISO 20022 and the Legal Entity Identifier (LEI).

Last month, the Reserve Bank of India (RBI) and Nepal Rastra Bank (NRB) signed the Terms of Reference on the integration of the UPI of India with the National Payments Interface (NPI) of Nepal for cross-border remittances. This will enable Nepalese workers and migrants in India to send money back to their families in Nepal using UPI. This will also reduce the cost and time involved in cross-border remittances, which are currently done through informal channels or expensive intermediaries.

A step towards a digital and cashless future

The UPI integration between India and Nepal is a step towards a digital and cashless future for both countries, as they embrace the benefits of fintech and innovation. Both India and Nepal have been making efforts to promote digital payments and financial inclusion in their respective economies.

India has launched several initiatives, such as the Digital India program, the Jan Dhan Yojana, the Aadhaar system, and the UPI itself, to create a digital and inclusive ecosystem. Nepal has also introduced various policies and measures, such as the Nepal Financial Inclusion Strategy, the Nepal Rastra Bank Payment System Development Strategy, and the NPI, to foster a digital and cashless economy.

The UPI integration will further enhance digital and cashless adoption in both countries, as it will create a network effect and a positive feedback loop. More users will be encouraged to use UPI for their payments, as they will find it more convenient, secure, and rewarding.

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More merchants will be motivated to accept UPI for their transactions, as they will find it more cost-effective, efficient, and profitable. More payment service providers will be incentivized to join the UPI platform, as they will find it more competitive, innovative, and scalable.

The UPI integration will also create a positive impact on the social and economic development of both countries, as it will enable greater financial inclusion, empowerment, and opportunities for the people. It will also foster greater trade, tourism, and cooperation between the two friendly nations, as it will create a common and seamless payment system for the citizens.