The popularity of India’s digital payment platform Unified Payment Interface, or UPI, has got another country hooked.
The National Payments Council of India (NPCI) announced yesterday (Feb.17) that Nepal has adopted the interface to bolster digital transactions. Launched in 2016, UPI enables interoperable person-to-person and merchant payment transactions. The NPCI regulates digital payments in India.
The move will also enable cross-border remittances between the two south Asian countries.
To deploy UPI in Nepal, the NPCI’s global arm, NPCI International Payments (NIPL), has partnered with its Nepalese counterpart, the Gateway Payments Service (GPS), and Bengaluru-based Manam Infotech.
“Over the next few months, the three entities—NPCIL, GPS, and Manam—will work closely together to deploy UPI in Nepal..,” said an NPCI statement (pdf) said.
This is not a first, though. Bhutan adopted UPI last July.
UPI’s popularity in India
In India, UPI transactions picked up particularly during the covid-19 pandemic, proving to be a breeding ground for several digital payments platforms.
In January this year, the transactions doubled to 4.61 billion (8.31 lakh crore rupees or $110 billion), against 2.30 billion transactions a year ago.
UPI is now set to grow through the AutoPay feature, which allows recurring payments of up to Rs5,000. The transition to the RBI’s new guidelines on e-mandates has helped, especially when recurring payments through cards saw huge disruptions.
What does it mean for India-Nepal ties?
In 2021, NIPL partnered with Singapore and Bhutan to accept UPI-based payments. It also tied up with the UAE’s Mashreq Bank to enable Indian travellers to pay for their purchases.
This new partnership now enables a real-time payment system in the Himalayan country. It will have its own UPI, own apps, with their own banks like India.
The move, a step towards financial integration, comes amid Nepal’s inclination to maintain equidistance between China to its north and India to its south.