How India’s UPI Innovation Can Make It a Financial Superpower, Starting with France.
How did UPI become international ?
How UPI technology is becoming international and what difference does it make to us ?, Every year, on July 14th,
France celebrates Bastille Day. There was a jail called Bastille in Paris. And during the French Revolution, the common people of Paris attacked this jail and the common people imprisoned by the French king were released.
UPI update in France
India’s Unified Payments Interface (UPI) is going global. Now, UPI will work in France as well! Prime Minister Modi was in France a few days ago. For the Bastille Day celebration, He was invited by the President of France. Prime Minister Narendra Modi and French President Emmanuel Macron have agreed to launch UPI in France
The launch of UPI in France is a significant achievement for NPCI, the organization that operates UPI. It shows that NPCI is committed to expanding UPI’s reach globally. NPCI is already working with other countries to launch UPI, and it is expected that UPI will be available in more countries in the near future. And then we got to hear a very important announcement. This moment plays a very important role in the French Revolution.
The announcement is that India and France have started an important partnership, now UPI will work in France too. And it will start with France’s most famous monument the Eiffel Tower.
Because it is a symbol, A symbol of breaking old systems and making a new and better system. On this occasion, our Prime Minister was in France. Like on our Republic Day, there is a parade in India similarly, on this day there is a parade in France. Our PM attended this parade. And on this symbolic day, an important partnership was unveiled to the public What they unveiled was that India’s tourists can visit the Eiffel Tower and make payments using UPI and this is a big deal.
Because through this, we can convince the European banks that UPI can work seamlessly with European banks too. Let’s know how UPI will work internationally and how it will impact the life of an Indian. UPI is going to be enabled in France, The announcement was made right now But NPCI had started working on it a year ago. NPCI stands for National Payments Corporation of India. In June 2022, NPCI signed an MOU with the Lyra Network of France. Usually, when an Indian tourist travels abroad, he has three options for payment.
- Number 1: Carry foreign currency. That is, while traveling in France, you have to convert your Indian rupees into Euros and you have to carry Euros in cash.
- Number 2: Buy a Forex card. It’s like buying Euros, but these Euros are saved in your card, not in your hand and on swiping the card, these Euros are deducted.
Now, the problem with these two methods is that this conversion rate is always in favor of the banks. While buying, we buy at a price higher than the exchange rate and while selling, we have to sell at a lower price than the exchange rate. Plus, these are preloaded cards. That is, before traveling, we have to estimate the expense. If the expense is more than our estimate, then while traveling, we have to arrange extra money. And if the expense is less, then the remaining money stays with you on which you do not get any interest.
- The third way to pay is to use your international debit or credit card. If international payments are enabled on your card, then you can pay with your Indian card
But in this method, the conversion rate is very high. Along with that, you are levied additional markup charges of 1% to 3.5% that is, in these three methods, Indian tourists in some way or the other do suffer a loss. But now, UPI is going to solve all these problems.
UPI’s international demand.
This year, that is in 2023 India is the President of G20 and on this occasion many international leaders and dignitaries are coming to India. India used this opportunity to give a live demonstration of UPI And showed the international crowd how fast, convenient, and seamless UPI is. The result of this demo was seen on 13th February 2023. Where our Union Minister, Ashwini Vaishnaw announced that now India’s UPI will be active in 13 countries.
Today, the situation is such, that companies like MasterCard and Visa rule over international payments and charge as much as they want.
Maybe some of you don’t know this, but whenever you swipe your card, not all of the money goes to the shopkeeper or the vendor some money gets deducted and directly goes to Visa or MasterCard. That is, your convenience fees has to be paid by the vendor.
But now this system will be over soon. Let’s know which countries are going to have UPI partnerships. Trade is a very important issue for Russia during this war this trade cannot be done in dollars. That is why Yuan or other currencies are being discussed for trade. By integrating UPI and Bank of Russia’s faster payment system(FPS), a seamless platform is being formed.
India’s RuPay and Russia’s Mir cards are trying to solve the problem of cross-border payment where Indian vendors can pay in rupees and Russian vendors in rubles. Last year, 11 million foreign tourists came to Thailand, 1 million of them were Indians, that is almost 10% of Thailand’s total tourism comes from India. To make it easy for tourists, UPI will be integrated with “PromptPay” service similarly, UAE’s Network International and Mashreq Bank, Singapore’s “PayNow“, United Kingdom’s “TerraPay” and “PayXpert“, Oman’s Central Bank, many such partners are now going to accept UPI. In all these partnerships, Singapore’s partnership is very special.
Singapore is the richest country in Asia when valued in per capita income terms Singapore’s per capita income is $67,000 US. Which is higher than America. Singapore’s demography is also special because out of Singapore’s total population 9% of the population is an Indian origin population. World Bank says that in 2023, $100 billion came from Singapore to India as remittance but due to international laws, fees, and borders, it takes on an average 24 hours for payments and to transfer $200, it also needs $3-6 as fees. This year, in the month of February, Singapore and India signed an important agreement and cross-border payment system was enabled.
What will happen with this?
There are three important points Let’s understand this.
- Indian students who study in Singapore, they can be sent money.
- If a buyer in Singapore buys Indian products the payment can be done in UPI. Similarly, if you want to buy something from a Singapore company, even then the payment can be done by UPI.
- Most importantly it opens a very important door for us and that is foreign investments.
Golden Gate Ventures, Jungle Ventures, Vertex Ventures. Venture capital companies like these are based in Singapore. Right now, there is a limit on UPI transactions between Singapore and India ₹30,000 per day but the success of this process will open new doors for FDI or foreign direct investments
Banking Superpower.
When we talk about banking or FinTech, India’s ranks third in the world. By 2030, our FinTech sector will cross the $1-trillion mark and by then, our economy will have become a $10-trillion economy. This means it will be more than double of what it is today In the 5G era, India is going to become a superpower or great power with lightning speed And this long journey begins with a bank account. The Global Financial Inclusion Database of World Bank says that 80% of India’s population has a bank account. Through Pradhan Mantri Jan Dhan Yojana, the number of bank accounts in India has increased significantly. Having a bank account seems to be a common thing, but it is a superpower for a common man because every bank account is linked to a unique ID, i.e. Aadhaar number. The money in hand is spent, but the money in the bank is saved, Money in the bank gets invested which then goes on to earn profit for you Increasing bank accounts is a proof that India is improving, moving forward.
UPI is a revolution and we have explained its importance in this article. Today, from ₹1 to 1 lakh from fruit apple to Apple tech product you can buy everything with UPI. Today, UPI has crossed the figure of 9 billion transactions with a net transaction worth $200 billion. This is the strength of India’s digital public infrastructure, i.e. DPI. Where India has built a whole system on its own without the help of any external software.
Weaponization of dollar.
Now India wants to give this digital infrastructure an international push. The main reason for this is the whole world at this moment is overly dependent on the dollar today the dollar has become a global reserve currency so, 80% of the world’s trade is done through the dollar If you have any currency, converting it into the dollar is easier than converting it into any other currency and this lends America power. The power to manipulate and control the dollar. America’s Fed prints the dollar It also dictates how every dollar of the world can be used because of this, not just against India, it becomes possible for America to take action against any country this is called weaponization of dollar.
America has abused this system before In 1999, during the Kargil War, America did this they cut India off their GPS system Here, I remember what American Leader John Connally said Dollar is our currency but your problem.
All the transactions of UPI pass through some Indian bank this technology is ours and we are not dependent on any foreign country to use it. With this, without touching the dollar, we can transfer money internationally that’s why UPI being international is important for all of us because it guarantees us that tomorrow, no matter what happens at the geopolitical level, we don’t have to stop trading internationally.
Conclusion
In the coming time, UPI is going to be the biggest export of India where other countries just export a product, we are going to export an idea. Through this idea, we can break the outdated system of dollar. Like the French Revolution was a social revolution, this is going to be a financial revolution because now, India’s travelers can pay internationally with UPI.
There are 70 lakh Indians in Gulf countries. Who can go tomorrow and send money directly through UPI to their homes when more banks get on board, UPI’s limits will be expanded, then foreign investment can also come to India in rupees and this development is very important for us. This partnership with France is an opportunity for India to prove that Western countries can also use our domestic technology seamlessly they can incorporate it into their systems and there is benefit for all but loss for only a few card companies who steal money from other countries through unnecessary fees.
Now going ahead, it is necessary to have clarity on some points when using UPI Like,
- What will be the conversion fees?
- In India, UPI is free but will there be any charges on UPI while traveling? If yes, then how many will come to India and how many will stay in other countries?
- Where will the UPI data be stored?
- Will even UPI transactions count towards the TCS limit of 7 lakhs?
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