How PhonePe made cross-border payments possible in India after 3 years of dedicated effort?

A few days ago, at the Global Fintech Fest 2023 in India, PhonePay and NPCI International Payments Limited (NIPL) announced that they are ready for cross-border QR payments between Nepal and India. This announcement was a significant achievement for Nepal, showcasing its technological prowess in front of fintech personalities from around the world. PhonePay, Nepal’s leading fintech company, played a major role in this collaboration with NIPL. The preparations for international payments between Nepal and India began three years ago in 2019 when PhonePay initiated discussions with India’s NPCI. NPCI informed PhonePay about the establishment of NIPL as an international branch and, in March 2020, NIPL was officially established. PhonePay and NIPL signed a non-disclosure agreement in August 2020, and in September 2020, PhonePay reached out to Nepal Rastra Bank for permission to make international payments. After receiving permission with some conditions, PhonePay signed an agreement with NIPL in March 2021. This long process has finally resulted in the ability to make international QR payments between Nepal and India. However, before the business can start, all member banks and financial institutions of PhonePay and NPCI must be onboarded. Currently, 7 banks and financial institutions in Nepal have joined PhonePay, while only one bank, Axis Bank, has joined NPCI in India. PhonePay aims to have all members onboarded within 6 to 12 months and plans to start the business by the end of September. The introduction of international QR payments offers numerous advantages, especially for tourists. Currently, visitors to Nepal face difficulties with cash and card transactions due to currency limitations and technical issues. With QR payment, merchants can easily receive payments by scanning the QR code, making transactions convenient and reducing costs. This system also allows Nepali tourists to make payments in India through Nepal’s mobile banking, further simplifying the process. However, not all transactions can be made through international QR payments, as there are specific criteria and limitations. The introduction of international payments brings its own set of challenges, including the need for robust technology and infrastructure to prevent fraud and money laundering. Therefore, special attention has been given to anti-money laundering measures and dispute mechanisms. The transaction limits and fees for international QR payments are similar to those for card transactions. As the business grows, it has the potential to expand further, and specific guidelines and regulations may be developed in the future to accommodate this growth. Overall, the implementation of international QR payments between Nepal and India is a significant milestone that will benefit both countries’ economies and simplify financial transactions for tourists.