International travellers in India are allowed to use this mode of payment only for merchant transactions, but once the Reserve Bank of India (RBI) gives its nod for interpersonal transactions, they will be able to use this service to also pay small merchants, public transporters and tourist guides, among others.
Currently, five players–Pine Labs, IDFC First Bank, Payworld, Transcorp and Cheq (operated by Trio Tech Solutions)–are enabled on UPI One World.
These platforms need foreign tourists to undertake a full KYC (know your customer) when they arrive in India to create a prepaid wallet, which they can top up through their domicile bank accounts. The wallet money can then be used via UPI to pay merchants. Even non-resident Indians (NRIs) can use this feature to enable transactions via their domicile bank accounts.
However, UPI One World has two pain points which limit its popularity. One is the mandate for a physical KYC and the other is restriction to only merchant transactions.
“In India, many small, micro-merchants, and public transport service providers actually use their personal bank accounts to accept UPI payments, so those transactions are not permitted under One World wallets,” said one of the people cited earlier. Once P2P (peer-to-peer) payments are enabled in this service, all forms of transactions will go through, he said.
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According to the other source, a suggestion has been submitted to the banking regulator that initially transactions with a limit of Rs 5,000 can be allowed on One World wallets.Emails sent to National Payments Corporation of India (NPCI) and the RBI remained unanswered.
Although the volume of UPI payments has vaulted, One World transactions continue to be a very small segment of the overall pie.
“It is hard to convince foreigners visiting India to submit physical copies of their passports and Visa documents to undertake a KYC. We assume UPI is known to all, but not everyone entering India knows about QR code-based UPI payments, so a lot of awareness building is needed,” said one of the persons cited earlier.
The entities that have the One World licence are trying to get direct integration with the ministry of external affairs so that verification of Visa and other travel permits can be done digitally, which will solve a large part of the problem. But as of now, nothing much has moved on that side, said one of the sources.
A senior banker said that given that NPCI wants to introduce UPI in different parts of the world, enabling international business travellers, leisure travellers and government officials to experience UPI during their stay in India is the best way to showcase the technology.
According to industry estimates, only a few crore worth of transactions are happening via UPI One World on a monthly basis, and the number of transactions would be around 40,000. For context, last year India saw around 9.4 million foreigners visiting the country.
