Indians traveling to many foreign markets, including the United Arab Emirates and Singapore, may soon be able to use popular UPI payments to make purchases when they land there.
Fintech giant PhonePe, headquartered in Bengaluru, said on Tuesday it was expanding support for UPI international payments to the United Arab Emirates, Singapore, Mauritius, Nepal and Bhutan.
“Users will be able to make foreign currency payments directly from their Indian bank, just like they do with international debit cards,” PhonePe said in a statement.
The move appears to be PhonePe’s attempt to capture a slice of the big forex market, a category where there’s a clear way for payment apps to make extra money, according to fintech industry executives with no affiliation with PhonePe.
PhonePe’s move is also in line with the vision of NPCI, the body that oversees UPI payments, which estimates that by this year, Indians in many foreign cities, including Dubai, will not need to use mobile devices. alternative method of payment, according to one of the fintech executives. .
A few other fintech apps are also expected to add cross-border UPI support in the coming months. UPI, created by a coalition of retail banks in India, is the most popular way for Indians to transact online. It processed over 8 billion transactions last month. UPI international is on the current NPCI roadmap.
Onboarding merchants to accept UPI payments in overseas markets will be a key test for India’s NPCI, as without merchants, users of PhonePe and other Indian UPI payment apps will not be able to make any payments. Ideally, acquirer-side UPI players should partner with local payment processors or aggregators that can extend UPI support at scale among local merchants. In India, while QR UPIs are ubiquitous, this is not necessarily the case elsewhere.
This is not the first time that a mobile payment app has tried to serve its home users in international markets. WeChat Pay and Alipay offer a similar service to their customers in many countries. But even for Chinese players, merchant acceptance has been the biggest challenge to overseas growth.
PhonePe is the most valuable fintech startup in India. Valued at $12 billion, the startup earned $234.3 million in revenue in the first nine months of 2022. The Walmart-backed startup is the most popular UPI app, with more than 50 % market share. But UPI currently doesn’t have a business model, which forces participating players to look for other ways to earn money.
“UPI international is the first major step in enabling the rest of the world to experience UPI as well,” said Rahul Chari, co-founder and chief technology officer of PhonePe, in a statement.
“I am sure this launch will be a game-changer and completely transform the way Indians traveling abroad pay at overseas outlets. PhonePe has always prided itself on being the first TPAP to release new UPI features, and this time is no different. We are happy that PhonePe is leading this change. The whole world needs to experience UPI!
