The Indian government and the Reserve Bank of India (RBI) are "very ambitious" about Unified Payments Interface (UPI) and its other digital payments products and wants it to be "everywhere".
"We want to be everywhere. Obviously, to begin with, some countries have shown interest so we are in talks with them. But our eventual objective is very ambitious. We want to be there in every country, be it UPI or other payments and digital products," a person aware of discussions said on September 5.
"The effort to internationalise the UPI is going on. Agreements have been signed with some countries, discussions are on with other countries. We want to popularise UPI globally. We also want to link the UPI with other countries' fast payments systems. That's one more way to make the UPI global," the person added.
The comments come days before New Delhi hosts the G20 Leaders' Summit on September 9-10, with India making use of its Presidency to showcase its prowess and progress in the digital payments space. Ahead of the third meeting of the G20 Finance Ministers and Central Bank Governors in Gandhinagar in July, India and the United Arab Emirates (UAE) signed Memorandums of Understanding (MoU) to set up a framework to use their respective local currencies to settle bilateral transactions and link their fast payment systems.
The MoU to link the UPI with UAE's Instant Payment Platform (IPP) came close on the heels of Prime Minister Narendra Modi's visit to France where he said that Indian tourists will be able to make rupee payments using UPI from atop the Eiffel Tower. Earlier this year in February, India and Singapore had inked a pact to link the UPI and Singapore's fast payments system PayNow.
"There is a lot of interest from many countries in both UPI and RuPay cards. They are at various stages of negotiations or discussions with these countries. In fact, the interest from countries goes way beyond those which are closer to us. We are seeing interest from Latin American and African countries. Both NPCI and RBI have been in discussions as well as the local high commissions and embassies," the source added.
Leaders' Summit preparations
As in previous G20 meetings held around the country over the past year, the RBI will have an exhibition pavilion at the Leaders' Summit later this week and showcase progress the country has made on five key areas: the Central Bank Digital Currency (CBDC), digital payments initiatives such as UPI One World and RuPay On-The-Go, the new public tech platform for frictionless credit, and Bharat Bill Payment System for cross-border bill payments.
India has been at the forefront of the retail CBDC revolution and launched a pilot in December 2022 with four cities and four banks. This has now been expanded to include 13 banks and 26 locations, with nearly 2 million users and merchants on board. The RBI is targeting 1 million transactions per day in the retail CBDC segment by December.
In July, 20,000-25,000 retail CBDC transactions were done, with August seeing a slight dip on account of banks' efforts to make the retail CBDC and UPI infrastructure interoperable.
"Based on the experience gained, different use cases and technical architecture will be tested in future pilots. Features like offline usage to provide resiliency and availability in the absence of network and programmability i.e., tying the use of funds to specific use cases are also being considered," sources said.
According to a source, the RBI is now planning to introduce the wholesale version of its CBDC in the inter-bank call market.
"The purpose of the wholesale CBDC pilot has been to try different technologies. Experimenting with technology is relatively easier for wholesale pilot," the person said on the condition of anonymity.
India also wants the RuPay card to be synonymous in the global payments space with other dominant players such as Visa and Mastercard.
"Right now, globally, 2-3 companies dominate the card payments space. We want RuPay to be considered one of them. For that, we are trying to see if RuPay cards have all the facilities that other cards have and even do more types of transactions. Our effort will be to keep adding new facilities and encourage other countries to use RuPay cards like we are doing with the UPI," the source said, adding that RuPay would have to be made attractive "on the basis of merit and features" and not regulatory dispensation.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
