LuLu Financial Holdings, an Abu Dhabi-based holding company investing in financial services, has partnered with NPCI International Payments Limited (NIPL) to offer consumers real-time remittances to India.
The partnership will enable LuLu Financial Holdings to connect to United Payments Interface, India’s real-time payments system, through its affiliates and offer remittances to beneficiaries who use UPI-powered apps, the company said in statement said on Wednesday.
NIPL is a subsidiary of the National Payments Corporation of India (NPCI), the country's umbrella organisation for retail payments.
“We are excited to partner with NIPL towards creating robust cross-border remittance solutions built on the strength of the UPI platform,” Adeeb Ahamed, managing director of LuLu Financial Holdings, said.
Money exchange services providers are increasingly offering instant remittance options to cater to customers who now rely on the convenience, speed and safety of digital remittance channels to send money home rather than visit physical branches for fear of contracting the coronavirus.
In July, Al Fardan Exchange partnered with Dubai digital banking start-up Jingle Pay to offer instant remittances. The alliance is aimed at customers aged under 40 seeking instant money transfer services. Similarly, Mashreq Bank tied up with India’s Federal Bank in May to offer customers a free money transfer service from the UAE to India through its digital QuickRemit platform.
Remittances are an important source of household income and foreign exchange inflows in India, with the country accounting for 33.6 per cent of all outward personal remittances from the UAE, according to the Central Bank of the UAE’s 2020 annual report.
“India is the largest recipient of cross-border remittances, receiving around $80 billion per annum,” Ritesh Shukla, chief executive of NIPL, said.
“This partnership with LuLu Financial Holdings is aimed at enabling seamless and convenient cross-border remittance experience through the UPI platform’s real-time capabilities,” he added.
The partnership will also assist with real-time validation of beneficiary names and compliance checks in a secure manner, the statement said.
NIPL was incorporated in April last year to deploy real-time payment system UPI and domestic card scheme RuPay outside India, according to the statement.
LuLu Financial Holdings’ affiliates include LuLu Forex and NBFC LuLu Financial Services in India, LuLu Exchange Company in Oman, LuLu Money in the Philippines and LuLu Financial Services in Hong Kong, among others, according to the company’s website.
Outward personal remittances from the UAE dropped by 5 per cent, or Dh8.3bn ($2.26bn), year-on-year in 2020, according to the Central Bank of the UAE’s annual report. Transfers through exchange houses fell by Dh18.1bn or 13.8 per cent, while outward remittances through banks increased by Dh9.8bn, or 28.8 per cent, the report said.
The UAE was the second-biggest market for outbound migrant remittances after the US in 2020, according to a study by Oxford Business Group and Al Fardan Exchange. In 2020, remittances by foreign workers in the UAE totalled $43bn.