Highlights

• India and Nepal have launched a real-time UPI-NPI remittance linkage.
• Users can transfer funds using mobile numbers and UPI IDs.
• The service aims to simplify cross-border payments and remittances.

NPCI International Payments Limited (NIPL), the international arm of the National Payments Corporation of India (NPCI), and Nepal Clearing House Ltd. (NCHL) have launched a payment linkage connecting India’s Unified Payments Interface (UPI) and Nepal’s National Payments Interface (NPI).

The integration enables real-time person-to-person (P2P) cross-border remittances between India and Nepal. The service allows users to transfer funds directly through banking applications using mobile numbers, virtual payment addresses (VPAs), and UPI IDs. The development is part of ongoing efforts to improve digital payment connectivity between the two neighbouring countries.

Source: Analysis by Kalkine 

How the UPI-NPI Linkage Works

Under the newly launched arrangement, Indian and Nepalese users in India can send money to beneficiaries in Nepal using mobile numbers or VPAs. Indian users residing in Nepal can also transfer money to India through UPI IDs.

The payment corridor facilitates instant fund transfers without requiring users to share detailed bank account information. The system is currently available through select banks and is expected to be extended to additional financial institutions over time.

Impact on Remittances and Cross-Border Transfers

Remittances play a significant role in economic activity between India and Nepal. The new payment infrastructure introduces a digital channel for transferring funds directly between bank accounts. Traditionally, many cross-border remittances relied on money transfer operators and intermediary channels.

With the UPI-NPI integration, eligible users can initiate transfers through participating banking applications, potentially reducing transaction friction and processing time. The linkage also aligns with broader efforts to improve accessibility and efficiency in cross-border payments.

What It Could Mean for Travellers and Shoppers

The integration may offer additional convenience for individuals who frequently travel between India and Nepal. Digital payment interoperability can simplify transactions by enabling users to access familiar payment methods across borders.

 As digital payment acceptance expands, travellers may find it easier to conduct transactions without depending entirely on cash-based payments. The development follows a broader trend of UPI’s international expansion, with payment acceptance and cross-border initiatives being introduced across multiple countries.

Digital Payments and Regional Connectivity

The launch reflects increasing collaboration between payment infrastructure providers in South Asia. Cross-border payment linkages are becoming an important component of regional financial connectivity as governments and financial institutions explore faster and more accessible payment solutions.

The India-Nepal payment corridor is designed to support secure and real-time transfers while enabling greater interoperability between digital payment ecosystems. For users regularly sending funds across the border, the initiative introduces an additional option within the formal banking system.

Availability Through Participating Banks

According to the announcement, the service has initially gone live through select banking partners. Additional banks are expected to be onboarded in subsequent phases.

The phased rollout approach allows participating institutions to integrate the infrastructure while expanding accessibility to a wider user base over time.

Key Risks

• Availability currently depends on participating banks and payment providers.
• Technical outages could temporarily affect transaction processing.
• Regulatory changes may influence cross-border payment operations.
• Adoption levels may vary among users and financial institutions.

Summary

India and Nepal have launched a real-time payment linkage connecting UPI and NPI, enabling person-to-person cross-border remittances. The system allows transfers using mobile numbers, VPAs, and UPI IDs through participating banking applications. The initiative seeks to simplify digital fund transfers, support financial connectivity, and provide an additional payment channel for users engaged in cross-border transactions between the two countries.

FAQs

Q: What is the India-Nepal UPI-NPI payment linkage?

A: It is a cross-border payment connection enabling real-time person-to-person remittances between users in India and Nepal.

Q: How can users send money through the new system?

A: Users can transfer funds using mobile numbers, virtual payment addresses, or UPI IDs through participating banks.

Q: Is the service available across all banks currently?

A: No, the service is initially available through select banks and may expand gradually to more institutions.