What is the government’s new policy of UPI for NRIs?

Last Updated03/02/2023

Recently, the National Payments Corporation of India (NPCI) paved the way for international (phone) numbers to be able to transact using UPI.
A day later, the Union Cabinet approved an incentive scheme for the promotion of RuPay debit Cards and low-value BHIM-UPI transactions in FY 2022-23.

Status of non-resident accounts: Non-resident external accounts (NRE) and non-resident ordinary accounts (NRO), having international numbers, will now be allowed into the UPI payment system.
UPI transactions to and from NRO/NRE accounts linked to Indian numbers back in October 2018 allowed.
NRE accounts: Ued by non-residents to transfer earnings from foreign soil to India
NRO accounts: Used to manage income earned in India by non-residents likr rent, interest, pension, among other things.
Countries that can avail the facility: Singapore, Australia, Canada, Hong Kong, Oman, Qatar, the U.S., Saudi Arabia, UAE, and the U.K.
Importance: It would allow NRIs to use UPI for making utility bill payments for their families in India, make purchases from online platforms & make payments to physical merchants who accept UPI payments when they travel to India.

Merchant Discount Rate (MDR): Charge recovered by the acquirer from the final recipient of the payment, that is, the merchant.
Collection: Collected by the acquirer to compensate the varied service providers and intermediaries in the payment system.
Currently, no MDR charge is levied for RuPay-based debit card & UPI transactions.

6,779.6 million transactions worth about ₹10.95 lakh crore facilitated
DigiDhan dashboard: BHIM-UPI accounted for 52% of all digital payments in FY 2021-22. At present, it stands at 59.74%.