Alternative To SWIFT: NPCI Plans To Take UPI System To 3.2 Crore Indians Working Abroad
Indians overseas remitted $87 billion last year, the biggest inflow for any country tracked by the World Bank
NPCI International Payments Ltd, the company that built India’s digital payments backbone, is planning to make it cheaper and easier for 3.2 crore expatriates to bring their money back home, the Bloomberg reported on Wednesday.
According to the report, Indians overseas remitted $87 billion last year, the biggest inflow for any country tracked by the World Bank.
Ritesh Shukla, chief executive officer (CEO), NPCI International Payments Ltd, said it is the ideal time to disrupt the remittances market, where it costs $13 on average to send $200 across borders.
“We have displaced cash in India to a large extent and are now looking to repeat the success in cross-border corridors,” said Shukla. “Overseas Indians can use our rails to remit money inwards straightway into their bank accounts, and for the markets where Indians travel frequently, we will build acceptance for our instruments.”
NPCI’s successful overseas forays would give India a home-grown alternative to SWIFT, the Belgium-based cross-border payment system operator. However, Shukla mentioned that NPCI’s objective was not to displace existing platforms.
About 330 banks and 25 apps, including Google Pay and WhatsApp, share NPCI’s unified payment interface, which has helped make instantaneous digital transactions a $3-lakh crore market in India.
How NPCI works?
NPCI is in the process of connecting the UPI platform to systems in other countries to replicate its domestic success. It is negotiating collaborations with governments, fintech firms, and service providers around the globe, aiming to reduce transaction costs and enable more small-ticket transactions.
Cutting costs
Mayank Goyal, CEO of moneyHop, said, “This is going to take the payments world by storm.” moneyHop, a cross-border banking app that lets users make international remittances through the SWIFT network, said the company will seek to integrate UPI rails into the app as it makes cross-border payments easier.
The Reserve Bank of India (RBI) in a report said UPI’s linkage with overseas will further anchor trade, travel, and remittance flows between the countries and lower the cost of cross-border remittances.
The RBI set up NPCI along with the country’s lenders to make retail payments faster, more accessible, and cost-efficient. A user just needs a virtual payment address to instantly transact with vendors and exchange cash between friends or family members.
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