Digital India Initiatives

Indians can now make Payments using UPI in UAE


From UPSC perspective, the following things are important :

Prelims level: Features of UPI

Mains level: Success of UPI payment system

Tourists or migrants to the United Arab Emirates (UAE) with Indian bank accounts will be able to make UPI payments at shops, retail establishments and other merchants in the gulf nation.

What is UPI?

  • Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI) facilitating inter-bank transactions.
  • The interface is regulated by the Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform.

How does the service work?

  • The NPCI and UAE’s Mashreq Bank’s NEOPAY have partnered for this service
  • It will be mandatory for users to have a bank account in India with UPI enabled on it.
  • The users will also need an application, like BHIM, to make UPI payments.

Will UPI be accepted everywhere in the UAE?

  • Payments using UPI will only be accepted at those merchants and shops which have NEOPAY terminals.

Does NPCI have other such international arrangements?

  • NPCI’s international arm NIPL have several such arrangements with international financial services providers for its products, including UPI and RuPay cards.
  • Globally, UPI is accepted in Bhutan and Nepal, and is likely to go live in Singapore later this year.
  • In Singapore, a project to link UPI with the city-state’s instant payment system PayNow is being undertaken by the RBI and the Monetary Authority of Singapore.
  • The linkage is targeted for operationalization by July this year.

Back2Basics: Bharat Interface for Money (BHIM)

  • BHIM is an Indian mobile payment App developed by the National Payments Corporation of India (NPCI), based on the Unified Payments Interface (UPI).
  • Named after B. R. Ambedkar and launched on 30 December 2016 it is intended to facilitate e-payments directly through banks and encourage cashless transactions.
  • The application supports all Indian banks which use UPI, which is built over the Immediate Payment Service (IMPS) infrastructure and allows the user to instantly transfer money between bank accounts of any two parties.
  • It can be used on all mobile devices.

Answer this PYQ in the comment box:

Q. With reference to digital payments, consider the following statements:

  1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
  2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.

Which of the statements given above is/ are correct? (CSP 2018)

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2


Post your answers here.
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