During the Digital Payments Utsav launch in February 2023, India’s technology minister Ashwini Vaishnaw revealed the Indian Government’s plan to introduce a framework that would facilitate secure digital credit to small and micro businesses. This framework would abide by the regulations of the Reserve Bank of India.
The news comes in the context of a recent crackdown on some digital lending apps over alleged links with China, data privacy concerns, and an unlawful code of conduct. In order to ensure that digital credit becomes as secure and as reliable as the country’s digital payment system, the Indian Government is working on an RBI-regulated framework.
Vaishnaw also informed citizens that a construct of digital credit will be created over the next 10 to 12 months and that the National Payments Corporation of India is heavily involved in the project. The facility aims to allow even small businesses such as street vendors to get associated with banks for easy credit.
The government also announced the integration of the Unified Payments Interface (UPI) with the national language translation platform Bhashini. The integration will allow users to transact through voice-based AI in 18 languages. Government officials announced that they are exploring ways to move on to the unconnected areas of India. They also have plans to transform the UPI into a global payment product by partnering with Nepal, Singapore, Bhutan, the UK, and the US.
In February 2023, digital payments company PhonePe has announced a feature that allows India-based users to make cross-border payments via UPI to foreign merchants. The fintech confirmed that it is going to extend support for UPI international payments in regions such as the UAE, Singapore, Mauritius, Nepal, and Bhutan, permitting users to carry out payments in foreign currency directly from their Indian bank, just like when using international debit cards.
PhonePe’s endeavour coincides with NPCI’s vision, the body overseeing UPI payments, which believes that within 2023, Indian citizens in a multitude of foreign cities, including Dubai, will not need to leverage any other payment methods, according to one of the fintech executives.
One of the primary challenges of India’s NPCI is onboarding merchants to accept UPI payments in foreign markets. Without merchants, PhonePe together with other India-based UPI payment apps will not be enabled to carry out any payments.
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