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Transactions using BHIM UPI made in Singapore, full launch in 2020

payments, digital payments

A demo of transactions made using the BHIM UPI started in Singapore on November 13, making it the first time that the platform has been used for making payments internationally, according to a PTI report. The project is expected to launch by February 2020. It is jointly developed by National Payments Corporation of India (NPCI) and Network for Electronic Transfers (NETS) of Singapore.

Once the project is implemented, anyone with a BHIM UPI will be able to make transactions at a NETS terminals by scanning the Singapore Quick Response Code (SGQR), and the demo would be live till November 15, the report said. At this moment, we don’t know if other UPI apps, such as Google Pay and PhonePe would also function in Singapore. We have reached out to NPCI, Google and PhonePe for clarification.

Prime Minister Narendra Modi had launched the BHIM app in Singapore last year along with RuPay and a UPI enabled remittance app by State Bank of India. Following the launch, RuPay users could make make payments at all NETS acceptance points across Singapore.

Srikanth L., from Cashless Consumer, a consumer collective focussed on digital payments, told MediaNama that the move isn’t truly international. “This isn’t purely international. Meaning they can’t onboard customers internationally. Only merchants,” he said. He also said that for now, regular forex cards might make more sense for Indian tourists in Singapore, but if with time, and if the cost of making cross border transactions via UPI comes down, it might eventually replace forex cards altogether.

Srikanth said that for transaction costs to come down, NPCI will have to aggregate all the UPI settlements, rather than they be done at individual banks. According to him, it is only then that the cost of transaction on UPIs can come down. Also, for BHIM to function across Singapore, its QR specifications will have to be updated, or terminals in the country will have to display QR codes as per BHIM standards, Srikanth said.

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In October, technocrat Nandan Nilekani had said that “cross border payments can be made easier with current systems using conventional approaches without creating a new synthetic currency”. Srikanth said that this could be a pilot for enabling what Nilekani had said, hinting at the creation of bilateral digital payment corridors.

China’s Alipay has a similar arrangement in the United States, where Chinese tourists visiting the US can use Alipay for transactions at Blackhawk’s network of retail partners.

Unanswered questions: 

  • How does this fit into RBI’s data localisation mandate? How will payments data that NETS’ terminals would collect be localised?
  • Has the RBI given its approval for this particular network?
  • How will chargebacks work for cross-border payments done via UPI?
  • Who will be responsible for making the settlements in cross-border payments – NPCI, NETS, or the bank with which the user has created the UPI ID?

We have reached out to RBI for clarification.

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