Using UPI in France: How It Works, Charges, and More

Posted on: Sep 27, 2023 | 3 mins | Written by: HDFC ERGO Team

Using UPI in France: How It Works, Charges, and More

Published on September 27, 2023. EST READ TIME: 3 minutes

If you're gearing up for an adventure in France, you're undoubtedly preparing for an unforgettable journey filled with rich culture, delectable cuisine, and breathtaking landscapes. As you embark on this international escapade, it's essential to ensure your safety and peace of mind. While an international travel insurance plan will safeguard you from a lot of potential pitfalls of travelling abroad, there is even more exciting news. Recently, the Indian government and French government have agreed to use UPI in France. Here is all that you need to know about the decision.

What is UPI?

The term UPI is ubiquitous and a lot of us use it on a daily basis. But if you are wondering what UPI is and how it works, well it stands for Unified Payment Interface. The NPCI or National Payments Corporation of India made way for transferring funds between different banks with the help of smartphone apps.

UPI allows you to transfer funds seamlessly to other individuals or merchants without having to pay any additional fees. And most importantly, the transfer is instantaneous. A majority of the transactions take place within a fraction of a second, making the transfer of money a hassle-free experience.

For UPI to work seamlessly, each entity or individual is provided with a VPA or Virtual Payment Address, which is commonly referred to as UPI ID as well. VPAs are unique and are linked to a specific bank account from which you can transfer and receive funds.

As an added level of security, you must provide a four or six-digit pin number, commonly known as UPI PIN to complete the transaction. Though it must be noted that you do not need UPI PIN to receive money from a sender.

Here are a few salient features of UPI payment methods.

1. Payment via UPI is free of any charge.

2. It enables people to transact throughout the day and night and is not limited to only baking hours. The service is available 24*7.

3. Unlike other popular payment methods such as IMPS or NEFT, UPI allows you to request funds from specific users or entities.

4. You can easily file a complaint for any fraudulent activities using your payment application.

5. Almost all banks offer UPI facilities through their mobile applications.

Expansion of UPI services to France

Recently India and France signed an agreement, which allows retailers in France to use UPI payments as their digital payment system. This makes France the first country in Europe to enable such digital payments. The announcement which made headlines recently, enhances the scope of UPI in foreign countries.

In simpler terms, Indians will now be able to use UPI as a mode of payment using Rupees, when they travel to France. The service will be first available in the Eiffel Tower. The introduction of UPI in France is expected to boost digital payment, which has a low penetration in the field.

How will UPI work in France?

UPI in France is a welcome move that travellers will rejoice in. Earlier, Indians travelling abroad had the option to choose from debit cards, credit cards or forex cards, apart from cash. And most of these options can be a bit expensive since conversion and markup fees come into the picture. The markup charges on the services can range between 1% to 3.5%.

However, UPI in France is set to change that. In France UPI payment will be done in Rupees. As of now, there has been an agreement between India's NCPI and France's Lyra Network. There is a possibility that there might not be any markup charges. However, further details are awaited.

Benefits of using UPI in France

In France UPI payment is set to alter the buying experience of Indians. If you are wondering about the benefits of UPI in France, here are some of the most prominent ones.

1. Using your existing UPI apps for payment in France will eliminate the use of Forex cards and the worry of converting cash to local currency before travelling.

2. Because the transactions will take place in Rupees, it will reduce the remittance cost of both countries as well.

3. The system which has been an instant hit in India, will make way for more seamless cross-border transactions, without any worries or hassles.

4. It will make way for a faster transaction process and reduce your waiting time for the same.

5. The system will also allow for transferring of funds 24*7, without the need for an IFSC code to transfer funds.

6. Students who are studying in France will particularly find the new payment option helpful and so will travellers and tourists.

7. Once its acceptance increases, it might even reduce the need for currency exchange, which usually attracts a fee in the range of Rs. 780 to Rs. 2,680.

Charges and fees

UPI transactions in India do not levy any charges. And as of now the announcement made by the Prime Minister of India states that NCPI and Lyra Network have an agreement to continue with the transactions on the Eiffel Tower. Unlike the traditional methods where the markup fees can be a considerable amount, UPI might not attract such hefty fees.

However, in France UPI Payment will be a cost-effective solution for Indians. Considering that the recent UPI agreement between Singapore and India allows travellers to save as much as 10% in cross-border transactions.

Limitation and restrictions

Though UPI in France has been announced, almost everyone is awaiting further details. This includes businesses as well as individuals. There isn't enough clarity regarding the cost of transfer and linkage for businesses as far as UPI is concerned.

As the adoption of UPI in France increases, banks and other relevant local authorities will decide on the charges, if any.

Comparison with other payment methods

While the introduction of UPI internationally is welcome news, there are a lot of other existing modes of transactions and payments available for everyone. People who are travelling for a shorter duration to international destinations can opt for a Forex card. It is a prepaid card, where you can convert rupees to the currency of the destination country.

Since Forex cards are widely accepted, you have a better chance of using the card. You can even use the card to withdraw cash from ATMs. While they offer excellent exchange rates and better security, they do carry some additional costs such as activation fees, inactivity fees, redeeming fees, etc.

Credit cards are ideal for people who travel a lot. Since you do not pay for the transactions up front, any sort of fraudulent activities can be easily taken care of. And not to mention, you can rake in the rewards points as well. However, the markup fees can be a bit high.

Another simple yet effective way of protecting your money and yourself abroad is by investing in travel insurance India has to offer. By investing a small amount in overseas travel insurance, you can safeguard your trip from loss of baggage, flight delays and cancellations, medical emergencies and more.

Conclusion

In France UPI payment initiation is a welcome move and will pave the way for other European countries to adopt UPI. If you are planning to travel to France, it is highly recommended that you opt for overseas travel insurance. Individual travel insurance will make sure that most contingencies of travelling abroad are covered and that you have a safe trip.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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