Fintech major PhonePe is going to start international payment facility through UPI. Through this, PhonePe users in India will be able to make payments to international merchants using UPI while traveling abroad. Currently, the countries that will be included in this feature include UAE, Singapore, Mauritius, Nepal and Bhutan. For this feature, UPI International has to be activated in the PhonePe app.
"Users will be able to make payments in foreign currency directly from their Indian bank - just like they do with international debit cards," PhonePe said in a statement. According to a fintech industry executive, the move appears to be an attempt by PhonePe to capture a piece of the larger forex market. This is a category where there is a direct opportunity for payment apps to make additional money.
Rahul Chari, Co-Founder and Chief Technology Officer of the company said, “Over the past 6 years, we have experienced the UPI payment revolution across India. UPI International is the first big step towards taking the UPI experience to the rest of the world.'
Chari said that the launch of this feature will prove to be a "gamechanger" and completely change the way Indians make payments while traveling abroad.
Some other fintech apps may also launch cross border UPI support in the coming months. UPI processed over 8 billion transactions last month. UPI International is on the roadmap of the existing NPCI. Onboarding merchants to accept UPI payments in foreign markets will be a test for India's NPCI as without merchants, UPI users will not be able to make payments.
This is not the first time that a mobile payment app has started serving its domestic users in international markets. Chinese company WeChat Pay and Alipay also provide similar service to their customers in many countries. However, even for Chinese players, onboarding merchants overseas has been challenging.
In the domestic UPI market, four apps - PhonePe, Google Pay, Paytm and CRD Pay hold 96.4% of the total UPI market share. It is led by PhonePe which accounts for around 49% of the total UPI transactions in India. PhonePe is followed by Google Pay with 34% share, Paytm with 11% share, CRED Pay with 1.8% share and others (WhatsApp, Amazon Pay and banking apps) with 3.5% share.