India Extends UPI Payments to France, Empowering Indian Tourists: During Prime Minister Narendra Modi’s state visit to France on July 13, 2023, India and France struck a ground-breaking deal that permits Indian tourists to use India’s Unified Payments Interface (UPI) for rupee transactions.
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This partnership marks a significant milestone as it brings UPI, a popular mobile-based payment system, to Europe for the first time after its successful implementation in Singapore. The move is expected to transform the payment experience for Indian tourists in France, removing the need to carry foreign cash and providing simplicity and flexibility.
UPI’s Global Expansion: A Journey Across the Globe
Since its inception, UPI has steadily expanded its reach globally through strategic partnerships. France is the latest addition to the list of countries that have embraced the UPI system for cross-border transactions. Prior to this agreement, UPI had already established itself in countries like Singapore, Bhutan, Nepal, and the UAE.
France, the United Arab Emirates, Saudi Arabia, Bahrain, Singapore, the Maldives, Bhutan, and Oman have all embraced various versions of Indian payment systems. This means that Indian users can now use UPI, RuPay, and other digital payment channels in these countries, making transactions easier and more convenient.
NIPL: Forging Global Partnerships
The NPCI International Payments Limited (NIPL), established as a wholly-owned subsidiary of the National Payments Corporation of India (NPCI) in April 2020, is actively forging partnerships with different countries to create a widespread acceptance network for RuPay and UPI. This network enables Indian travellers to make payments in their destination countries via various digital payment methods.
Empowering Indian Tourists with Effortless Transactions
With the implementation of UPI in France, Indian tourists can now transact in rupees with ease. They can make payments using local QR codes or UPI IDs, removing the need to carry and exchange foreign currency. This newfound convenience allows tourists to spend according to their needs rather than being restricted to fixed amounts of foreign exchange.
Savings on Foreign Exchange Markup Charges
Historically, international payments made with credit or debit cards include foreign exchange markup costs of up to 3.5% of the transaction amount, depending on the card’s features. While some financial institutions offer forex cards with lower markup fees, UPI payments in rupees provide even greater savings. Since transactions occur in rupees, there is no need for foreign currency conversion, saving travelers from additional fees.
UPI and the Liberalized Remittance Scheme (LRS)
Under the Foreign Exchange Management Act (FEMA), travel-related expenses fall within the purview of the Liberalized Remittance Scheme (LRS). As a result, the standard Tax Credited at Source (TCS) requirements apply. TCS applies to international debit cards, prepaid forex cards, and direct foreign currency purchases; however, credit card spending is exempt. However, not all establishments accept credit cards, making it necessary to carry cash. With UPI payments now available in France, this necessity is eliminated, making transactions smoother for Indian tourists.
