UPI for NRIs: What You Need to Know

Unified Payments Interface (UPI) has transformed how people in India handle money, enabling secure and instant digital transactions. This platform, launched by the National Payments Corporation of India (NPCI) in 2016, initially served only resident Indians, but the NPCI has expanded its access to include Non-Resident Indians (NRIs). NRIs can now use UPI to send and receive payments in Indian Rupees (INR) through their NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank accounts, making this a breakthrough in seamless, cost-effective financial connectivity for the Indian diaspora.

In August 2024, UPI recorded a record-breaking 14.96 billion transactions, amounting to a value of ₹20.6 lakh crore, marking year-on-year growth of 41% in transaction volume and 30% in transaction value. These stats underscore the growing popularity and convenience of UPI for Indians worldwide.

Why UPI for NRIs is a Game-Changer

UPI access for NRIs brings several strategic advantages that make financial transactions faster, simpler, and more economical for Indian expatriates:

• Lower Remittance Costs: Using traditional remittance services can be costly. UPI eliminates additional fees, offering NRIs a zero-cost or low-cost method to send funds directly to India, improving convenience while reducing expenses.
• Strengthened Financial Inclusion: UPI allows NRIs to maintain close ties with Indian banking without the hassle of physically visiting a bank. This connection fosters greater financial inclusion, ensuring NRIs are always part of India’s economic ecosystem.
• Growth in Digital Transactions: As NRIs adopt UPI, the volume of digital transactions in India continues to climb. This not only propels India’s digital economy but also boosts global recognition of the UPI system.
• Closer NRI-India Bonds: UPI for NRIs fosters a stronger financial relationship between India and its overseas citizens. With UPI, NRIs can easily support family members, pay bills, and make investments in India, strengthening the bond with their homeland.
• International Recognition for UPI: With the inclusion of NRIs, UPI has become an internationally acknowledged digital payment system, elevating India’s reputation in the digital finance landscape.

Setting Up UPI for NRIs: A Step-by-Step Guide

Getting started with UPI for NRIs is straightforward. Here’s how you can set up UPI for your NRE or NRO account:

1. Choose a UPI App: Popular apps like BHIM UPI, Google Pay, and PhonePe are widely used for UPI. Download and install your preferred app.
2. Register: Register on the app using your Indian mobile number. Verification is typically done via an OTP sent to your linked phone number.
3. Link Your Bank Account: Once registered, link your NRE or NRO account. You may need to provide and verify bank details.
4. Create Your UPI ID: After linking, the app will generate a UPI ID, which will be associated with your bank account.
5. Set Up Your UPI PIN: Choose a secure PIN for authorizing transactions on the platform. This step secures future transactions and ensures only you can authorize payments.

Note: ICICI Bank recently introduced the option for NRIs to use their international numbers for UPI, provided these numbers are linked to an NRE/NRO account. Although other banks have yet to adopt this feature, it may become more common in the near future.

Using UPI for Payments and Transfers

Once your UPI is activated, payments and transfers become hassle-free. Here’s how NRIs can use UPI for payments:

• Scan and Pay: To pay, you can scan a merchant’s QR code and authorize the transaction with your UPI PIN.
• Send to UPI ID or Mobile Number: For peer-to-peer transfers, you can send money to another UPI ID or the mobile number linked to UPI.
• Bank Account Transfers: You can directly transfer funds to a bank account if the recipient doesn’t have UPI.

The NPCI has a daily limit of ₹1 lakh for transactions, with new users restricted to ₹5,000 for the first 24 hours. However, transaction limits can vary depending on the bank, so NRIs are advised to check with their banks for the latest guidelines.

Top Benefits of UPI for NRIs

UPI for NRIs delivers multiple benefits that enhance the financial lives of Indians living abroad:

• Efficient and Convenient: UPI is one of the quickest methods to transfer money within India, ideal for everything from remittances to emergency family expenses.
• Low-Cost Transactions: Most UPI transactions are free or attract minimal charges, making it a cost-effective choice for frequent fund transfers.
• Security: UPI utilizes robust encryption and multi-layered authentication, ensuring secure transactions.
• Real-Time Updates: You can track your transactions immediately on the app, making it easier to manage and monitor finances.
• Wide Acceptance: UPI is accepted across India, from small merchants to large retailers, ensuring funds sent can be used anywhere.
• Government Support: UPI is backed by the Indian government, which provides ongoing updates to ensure seamless functionality and security.

Challenges Faced by NRIs Using UPI

While UPI simplifies banking for NRIs, there are some challenges to be aware of:

• Mobile Number Verification: For NRIs who haven’t used their Indian SIM in a while, re-verification can be required, which might pose difficulties.
• Transaction Limits: Some banks may impose lower transaction limits on UPI for NRIs than for resident users.
• Technical Glitches: As with any digital platform, UPI can experience occasional outages that may delay transactions.
• Fraud Prevention: Due to increased fraud risks, NRIs are advised to be cautious when accepting UPI requests and to verify transaction details carefully.

Countries Where NRIs Can Use UPI

NRIs in certain countries can use UPI for payments, enabling smoother remittances and transfers. Here are the regions currently supporting UPI:

• United States, United Kingdom, Canada, Australia, Singapore, UAE, Saudi Arabia, Qatar, South Africa, Germany, France, Netherlands, Hong Kong, Malaysia, New Zealand, Oman.

Please note that while UPI access is expanding, the list of countries may continue to grow as the NPCI negotiates with additional financial jurisdictions.

Best Indian Banks Offering UPI for NRIs

Several leading banks in India currently support UPI services for NRIs, allowing NRE/NRO account holders to link to the UPI system. These banks include:

• ICICI Bank
• HDFC Bank
• State Bank of India (SBI)
• Axis Bank
• Punjab National Bank (PNB)
• Bank of Baroda

It’s recommended to reach out to your specific bank to confirm UPI options and ensure compatibility with your international mobile number if using one.

Conclusion

UPI for NRIs has simplified payments, making money transfers from NRIs to residents in India more accessible, affordable, and secure. Although there are some limitations, such as transaction caps and mobile verification issues, the benefits far outweigh these minor inconveniences. By adhering to best practices and exercising caution, NRIs can leverage UPI to stay financially connected with family and friends in India.

Frequently Asked Questions

Does UPI for NRIs work only with BHIM or Google Pay?

UPI for NRIs can be used across multiple apps, including BHIM, Google Pay, PhonePe, Paytm, and Airtel Payments App.

Is OTP required for each UPI transaction?

No, NRIs don’t need an OTP for each transaction. Instead, a UPI PIN, which is set during setup, is used for transaction verification.

How do NRIs create a UPI ID?

NRIs can create a UPI ID by linking their Indian mobile number or select foreign numbers (if supported) with their NRE or NRO bank accounts. Once registered on a UPI app, the app generates a unique UPI ID for them.

Can NRIs use UPI with an international phone number?

Currently, ICICI Bank allows NRIs to link international phone numbers for UPI transactions. However, most banks still require an active Indian mobile number.

What are the limits for UPI transactions for NRIs?

The daily transaction limit set by NPCI is ₹1 lakh, although this can vary by bank. NRIs are advised to check with their respective banks for any variations.

Additionally, you can explore more about UPI for NRIs on our services on our NRIHelpline.

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External Resources:      Income Tax Department India

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