This article is posted in Bloomberg and discusses plans by India’s NPCI, which is an umbrella organization for operating retail payments and settlement systems, to create less expensive cross-border payments. India has been on a digital payments transformation path for the last decade and NPCI is responsible for creating the new backbone, while managing a number of different systems. One of the systems managed by NPCI is the Unified Payments Interface (UPI). This is a real-time system for instant transfers, using digital remittances, between individual bank accounts and also between consumers and merchants.
‘Indians overseas remitted $87 billion last year, the biggest inflow for any country tracked by the World Bank. The remittances market, where it costs $13 on average to send $200 across borders, is ripe for disruption, according to Ritesh Shukla, chief executive officer of NPCI International Payments Ltd…
“We have displaced cash in India to a large extent and are now looking to repeat the success in cross-border corridors,” said Shukla. “Overseas Indians can use our rails to remit money inwards straightway into their bank accounts, and for the markets where Indians travel frequently, we will build acceptance for our instruments.”
The plan underway is to connect the UPI platform to payments systems outside of India in order to facilitate faster digital remittances between countries. Data in the article suggests that the transaction value across UPI has roughly tripled since May of 2020. Many readers will know that there are numerous initiatives underway globally for creating better cross-border experiences and expenses, primarily retail in nature but also involving some wholesale payments as well. This initiative by NPCI bears watching as execution gets going, which we assume will be forthcoming as an ongoing series of announcements.
‘UPI’s linkage with overseas nations will further anchor trade, travel and remittance flows between the countries and lower the cost of cross-border remittances, the Reserve Bank of India said in a report…
The Reserve Bank of Indiaset up NCPI along with the country’s lenders to make retail payments faster, more accessible, and cost-efficient. A user just needs a virtual payment address to instantly transact with vendors and exchange cash between friends or family members.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group