UPI in Nepal: NPCI signs deal with Fonepay for QR code-based transactions

The Unified Payment Interface is now live in Nepal. NPCI International Payments Ltd (NIPL) and Fonepay Payment Service have signed a deal for cross-border transactions between India and Nepal.

Both entities are now fully operational and ready to facilitate QR-code-based person-to-merchant (P2M) UPI transactions between the two countries. In its first phase, this partnership will enable Indian consumers to make instant, secure and convenient UPI payments across various business stores in Nepal by using UPI-enabled apps. Merchants acquired by the participating members of Fonepay Network can seamlessly accept UPI payments from Indian customers.

Last month, the Reserve Bank of India (RBI) and Nepal Rastra Bank (NRB) signed the Terms of Reference on the integration of the UPI of India with the National Payments Interface (NPI) of Nepal for cross-border remittances.

In a statement in February, the RBI said: "The collaboration between India and Nepal in linking their fast payment systems through the UPI-NPI linkage will further deepen financial connectivity and reinforce the enduring historical, cultural, and economic ties between the two countries. Based on the Terms of Reference exchanged between RBI and NRB, the necessary systems will be put in place for the interlinking of UPI and NPI. The formal launch of the linkage i.e., commencement of operations will be done at a later date." 

Speaking on the expansion of services, Ritesh Shukla, CEO of NIPL, said: “We are elated to join hands with Fonepay to enable UPI payments in Nepal. This initiative not only signifies our commitment to innovating the digital payments space but also reflects our dedication to creating new avenues for trade, strengthening the bond between the two nations. We envision this partnership as a catalyst for greater financial inclusion and economic prosperity in the region.”

Diwas Kumar, CEO of Fonepay, said: “I am confident that this cross-border payment solution will significantly improve economic ties, commerce, and tourism between the two nations, eventually promoting economic prosperity and progress. The seamless cross-border payment solution aligns with our commitment to drive digital economy to the greatest height, and we anticipate a positive ripple effect on both local and regional economies."

Last month, the NPCI declared that payments through the UPI will be accepted in seven countries after its recent launch in Sri Lanka and Mauritius. These countries are France, UAE, Mauritius, Sri Lanka, Singapore, Bhutan, and Nepal.

Earlier this year, Google India Digital Services (P) and NPCI International Paymentssigned an agreement to expand the UPI platform beyond India. 

The MoU aimed at expanding the reach of UPI payments for international travelers, facilitating transactions abroad. It would support creating UPI-like systems globally, enhancing cross-border remittances. By  leveraging UPI infrastructure, it would streamline financial exchanges. This initiative would boost UPI's global adoption, granting foreign merchants access to seamless transactions.