The National Payments Corporation of India (NPCI) has teamed up with Google Pay to accelerate Unified Payments Interface (UPI)-related ambitions including establishing ‘UPI-like’ digital payment systems in other countries.
UPI, which is widely seen to have been a great success in enabling greater take-up of digital payments across India since being introduced in 2016, enables people to use mobile-phones to send and receive money while eliminating the need to enter bank details or other sensitive information during a transaction. It is often referenced as a model for public authorities around the world looking to modernise and digitise payments for reasons including the sheer scale of its reach – India overtook China as the world’s most populous country last year, according to UN population estimates.
NPCI was established just over 15 years ago by the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA). Its international arm has this week signed a Memorandum of Understanding (MoU) with Google Pay to ‘expand the transformative impact of UPI to countries beyond India’.
There are three principal aims: to broaden the use of UPI payments for travellers outside India, ‘enabling them to conveniently make transactions abroad’; to ‘assist in establishing UPI-like digital payment systems in other countries, providing a model for seamless financial transactions’; and ‘easing the process of remittances between countries by utilising the UPI infrastructure, thereby simplifying cross-border financial exchanges’.
The objectives will ‘help accelerate UPI’s global acceptance, providing foreign merchants access to Indian customers who will no longer have to rely only on foreign currency and/or, credit or forex [foreign exchange] cards for making digital payments and will have the option using UPI-powered apps from India including Google Pay’, according to NPCI’s announcement.
RELATED ARTICLE Nepal adopts India’s UPI payments platform – a news story (16 March 2022) on the NPCI’s international arm partnering two companies to roll out UPI in India’s neighbour country
‘Transformational’ global ambition
The MoU is between Google Pay and NPCI International Payments (NIPL), which was launched almost four years ago to drive the deployment of UPI, as well as card-payment network RuPay, outside India.
It is announced almost two years after the NIPL announced that it was partnering two companies (Indian fintech Manam Infotech and Nepalese payment system operator Gateway Payment Service) to enable people in neighbouring country Nepal to use UPI – just one example of a growing number of moves to promote UPI beyond India.
NPCI International Payments chief executive Ritesh Shukla spoke this week of “propelling UPI onto the global stage” through the multi-pronged Google Pay tie-up.
“This strategic partnership will not only simplify foreign transactions for Indian travellers but will also allow us to extend our knowledge and expertise of operating a successful digital payments ecosystem to other countries,” said Shukla, who worked for Mastercard and, before that, Visa before moving to the NPCI in 2020.
“We are also excited about enabling a seamless and more connected international remittance network by further expanding UPI’s cross-border interoperability feature,” he continued. “With the success of UPI in a dynamic market like India we are excited to further our vision to transform the digital payments landscape globally.”
Google Pay India director for partnerships Deeksha Kaushal said: “UPI has demonstrated to the world the step-change that happens in economies with the introduction of interoperable, population-scale digital infrastructure and each economy that joins such networks will create impact beyond the sum of parts. We are very excited about the scope of this collaboration.”
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International payments push
The Monetary Authority of Singapore (MAS) and Arab Monetary Fund (AMF) are among the authorities to have made announcements related to UPI over the past couple of years.
MAS and the Reserve Bank of India (RBI) launched a linkage between Singapore’s payment system PayNow and UPI in February last year. Separately, an MoU was signed by Shukla and Mehdi Manaa, the chief executive of Buna, the AMF-owned cross-border and multi-currency payment system, in March 2022 to support payments interoperability. In July last year, the RBI and United Arab Emirates (UAE) signed an MoU to interlink payment and financial messaging systems.
Indian authorities’ enthusiasm to promote its technology worldwide was exemplified 18 months ago when the government made its payments and digital ID technology available to all countries worldwide via open APIs (application programming interfaces) under the country’s ‘India Stack’ initiative. Indiastack.global, described as a ‘global repository of key projects’, includes UPI, as well as digital ID system Aadhaar.
India’s government is showcasing the country’s fintech credentials at the World Economic Forum Annual Meeting in the Davos, Switzerland, this week (see video embedded below).
INDIAN AUTHORITIES’ FINTECH ENTHUSIASM: WATCH THIS (41min45sec)
‘Cashless Catalyst: The Fintech & Digital Boom in India and Beyond’ panel discussion at the World Economic Forum Annual Meeting 2024 (session on 16 January).
Source: Invest India channel on YouTube