NPCI International Payment Ltd (NIPL) recently signed a Memorandum of Understanding with Western Union to enable real-time payment to a bank account in India. NIPL is the international payments arm of the National Payments Corporation of India (NPCI) which was launched last year with the aim of exporting NPCI’s locally developed payments and technology offerings, such as RuPay and UPI, to foreign markets. In an interview, Ritesh Shukla, CEO of NIPL, talks about the new offering and designing solutions for Indians to send money overseas. Edited excerpts:
Can you tell us in detail how it will work?
Our partnership with Western Union and other players is to provide the best cross-border money transfer experience to over 30 million Indians living outside India. Currently, this experience is very fragmented for consumers because it requires incremental work.
This partnership will allow Western Union users as well as non-users to send money to India in a simplistic way using the recipient’s Unified Payment Interface (UPI) credentials. The sender can simply put the recipient’s UPI ID on the channel enabled by Western Union. Our agreement with Western Union will be based on UPI’s robust and innovative infrastructure that will extend a superior, fast and secure customer experience by allowing users in India to receive real-time international money transfers to their bank accounts. Indian expats or people of Indian descent (PIO) living across the world will be able to send money through the integrated Western Union and UPI channels to their friends and relatives using UPI ID. All eligible UPI member banks will be enabled for the service.
What will be the costs involved?
The fees / charges for a cross-border transaction are levied by the money transfer service provider in the overseas market and these charges are usually based on market dynamics and available channels. Our effort would be to work with Western Union to optimize costs while ensuring a superior customer experience. We will strive to make charges sustainable and more affordable in the long run.
When is this service likely to be operational?
We plan to launch the service by the second quarter of next year. This service will benefit millions of Indian citizens to receive money from abroad seamlessly.
Are you also looking to design solutions that allow customers to send money overseas?
We are working on a solution under the leadership of the Reserve Bank of India (RBI) to allow Indians to send money outside of India. Our solution will serve multiple use cases in retail payments for people who want to send money to family and friends overseas, pay education fees, or for any other purpose authorized by RBI. .
A recent study showed that Indians paid ??26,300 crore in exchange fees in 2020. Do you think that the launch of the real-time payment service to bank account by NIPL will lower this figure?
We are aware of the current challenges of cross-border remittance, including fees, fragmented user experience, lack of transparency, and long turnaround times. We work collaboratively with key stakeholders such as governments, regulators, fintech companies, service providers, stock exchanges and national switches to co-create market specific solutions.
As each geographic area has specific needs, payment solutions must be tailored to market needs and preferences.
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