In its Annual Report for 2023-24, RBI, in collaboration with NPCI International Payments Ltd. (NIPL), set an agenda to work on expanding UPI.
- RBI also aims to explore collaboration on Fast Payment System with groups of countries such as European Union and SAARC, along with multilateral linkages.
About UPI
- UPI, launched by NPCI in 2016, powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing & merchant payments.
- Currently, several countries, including Bhutan, Nepal, UAE, France, Mauritius, etc., support UPI payment.
Significance of Internationalization of UPI
- Global market expansion: Faster and easier cross-border payments can stimulate trade between India and other countries.
- Interoperability and standardization: Wider adoption of UPI can promote interoperability between payment systems across countries ensuring smoother integration with financial technologies worldwide.
- ‘Digital’ diplomacy: Strengthening of India’s influence and goodwill through technological collaboration.
Challenges in Internationalization of UPI
- Regulatory compliance: Ensuring compliance with diverse regulatory frameworks across multiple jurisdictions can be complex and time-consuming.
- Security and data privacy: Robust security measures, encryption protocols, and data protection mechanisms are needed to maintain user trust.
- Others: infrastructure disparities, competition from established players such as China’s Alipay, etc.
Steps taken for Internationalization of UPI
Note: UPI is an integral part of the Payments layer of Digital Public Infrastructure. |