Indian tourists visiting the UAE now have a new, convenient payment option. With the integration of India’s Unified Payments Interface (UPI), they can make payments directly in Indian rupees from their bank accounts back home. This update promises to benefit major sectors in the UAE like retail, hospitality, and gold and jewelry sales. Let’s explore how this change will impact both tourists and local businesses.
Seamless Payments for Indian Tourists
Indian visitors can now pay for their purchases using UPI, making transactions more straightforward. Whether buying jewelry at a local souq or booking a hotel room, tourists can simply use their smartphones with their Indian bank’s app. Hence, this innovation enhances the shopping experience, making trips more enjoyable and hassle-free.
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Key Partnership for Smooth Transactions
The UAE’s Network International partnered with India’s NPCI International Payments. This collaboration enables QR code-based UPI payments at over 200,000 point-of-sale (PoS) terminals operated by Network International in the UAE. As more banks and merchants adopt this system, rupee-based transactions will become even more accessible for Indian visitors.
Training and System Integration for Merchants
To ensure smooth operations, store staff in the UAE are being trained to use QR-based systems on PoS machines. Ashish Panjabi, Chief Operating Officer at Jacky’s Group, highlighted the need for integration with existing systems. He noted that UPI rupee payments could be more competitive than traditional card solutions. This preparation is crucial for providing a seamless shopping experience for Indian tourists.
Cost Considerations and Transaction Limits
For Indian visitors, the cost of using their rupee-based domestic accounts is an important factor. There is a daily transaction limit of Rs 1 million (or Rs 10 lakh) set by the Reserve Bank of India (RBI) during the initial stages of the UPI rollout. While there is concern about potential forex-related transaction costs, users could experience lower fees since UPI transactions in India are generally free.
Impact on UAE Retail Sectors
The gold and jewelry market, in particular, is enthusiastic about this development. Anil Dhanak, Managing Director at Kanz Jewels, believes that enabling rupee transactions will enhance the shopping experience for Indian visitors and potentially boost sales for retailers in the UAE.
Enhancing the Shopping Experience
Allowing Indian tourists to use their home currency directly will significantly improve their shopping experience and convenience. The UPI system’s ease of use, combined with the familiarity of using their domestic bank accounts, is likely to encourage more spending and attract a larger number of Indian tourists to the UAE.
Long-Term Prospects
As UPI transactions become more common in the UAE, transaction costs are expected to decrease, further incentivizing Indian tourists to use this payment method. Krishnan Ramachandran, CEO of financial services firm Barjeel Geojit, noted that increased transaction volumes could lead to lower costs over time. Additionally, more UAE banks are expected to support UPI, making it even more widely accepted.
The introduction of rupee-based transactions in the UAE through UPI marks a significant advancement in payment solutions for Indian tourists. By providing a seamless, cost-effective, and convenient payment method, this initiative is set to benefit both visitors and UAE retailers alike. As the system gains traction, it promises to enhance the overall travel and shopping experience for Indian tourists, solidifying the UAE’s status as a premier destination.
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