India has successfully launched it's Unified Payments Interface (UPI) in both Sri Lanka and Mauritius. The announcement came on Monday, February 12, during a virtual ceremony attended by Prime Minister Narendra Modi, Sri Lankan President Ranil Wickremesinghe, and Mauritius Prime Minister Pravind Jugnauth.
RuPay card services were initially launched in Mauritius as part of it's strategic initiative.
The inauguration of India’s UPI in these two nations signifies the modernization of age-old ties through digital means. The first UPI transactions in both countries were conducted shortly after the launch, highlighting the seamless integration of digital payment systems across borders.
During the launch event, Prime Minister Modi emphasized the significance of leveraging Fintech connectivity to strengthen not only cross-border transactions but also interpersonal connections among the nations in the Indian Ocean region.
He articulated India's commitment to its 'Neighborhood First' policy and its vision for Security And Growth for All in the Region (SAGAR), emphasizing the importance of peace, security, and development in the entire region.
Modi said, "The transformative impact of Digital Public Infrastructure in India, has facilitated widespread adoption of digital payments even in the most remote areas of the country"
He further added, "The convenience and speed offered by digital transactions, empowers businesses and individuals alike"
Mauritius Prime Minister Pravind Jugnauth also lauded the collaboration, stating that the integration of India's UPI with Mauritius' national payment switch, MoCAS, would further strengthen the existing cultural, commercial, and people-to-people linkages between the two countries.
He said, "The commitment made at the G20 meeting under India's presidency to enhance access to digital services and leverage digital transformation for inclusive growth has been remarkable"
With the addition of Sri Lanka and Mauritius, the list of countries utilizing India's UPI service continues to grow.
Previously, nations including France, Bhutan, UAE, Oman, and Singapore have aslo adopted this digital payment solution, showcasing its effectiveness and reliability on the global stage.
As for Indians using the services overseas, it has both positive as well negative impacts. Indians abroad will find it convenient to make payments using UPI, leveraging their Indian bank accounts linked to their international mobile numbers. This eliminates the need for multiple currency conversions and enables seamless transactions.
UPI transactions typically have lower transaction fees compared to traditional international payment methods like credit cards. This could result in cost savings for users, especially for smaller transactions.
With more countries, like France agreeing to allow UPI payments, Indian travelling or living abroad will have wider access to this payment system. This will eventually promote financial inlcusion and ease financial transactions for the Indian diaspora.
One of the drawbacks this move poses is that NPCI lacks it's own treasury, it may struggle to offer competitive exchange rates for foreign transaction initially. This could further result in higher costs for users, especially when converting large sums of money.
International UPI transactions may incur additional transaction charges and currency conversion fees. The exact fees may vary depending on banks, payment service providers, and regulatory guidelines, potentially making it less cost-effective for users compared to local transactions.
Until the implementation of international UPI transactions is fully operationalized, there may be uncertainities regarding transaction processes, fees and regulations, which could potentially impact user confidence and adoption.
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