The Government of India’s (GoI) ambitious instant real-time payment system, UPI (Unified Payments Interface), has been of late claiming worthy commendation on the international level. Developed by NPCI, UPI powers multiple bank accounts into a single mobile application (of participating banks – 144 now –, with their own UPI App), merging several banking features. Inter-bank transactions, seamless fund routing and merchant payments under one umbrella application have gotten picture-perfect due to the UPI system.
Google LLC has vouched for India’s UPI in its letter (by Mark Isakowitz, Vice-President, Government Affairs and Public Policy, Google USA and Canada) to the US Federal Reserve – recommending Federal Reserve to develop its new 24×7 real-time gross settlement service (RTGS) in accordance with India’s UPI, reports YourStory.
On comparing the number of transactions processed by UPI on a year-on-year basis (2018-19), it is learned that a record 187% or ~ 3X growth is registered, aggregating 10,787.54 million or 10.8 billion transactions in 2019, per the data sourced from NPCI. Having clocked 1.3 billion transactions in December 2019, UPI transactions achieved a 111% higher year-on-year rise, per the data released by NPCI – with the transactions worth Rs. 2.02 trillion in December 2019, as reported by livemint.
As recently as in January 2020 livemint reported that UPI grew by 442% in Delhi, per Razorpay’s ‘The Era of Rising FinTech’ report. In the latest development surrounding the UPI system, the National Pension System (NPS) has begun permitting UPI payments up to Rs. 2,000 when contributing online via NSDL (eNPS – enps.nsdl.com) or Karvy (enps.karvy.com) – this attracts a minimum transaction charge of Rs. 10 or 0.5%.
In October 2019, YourStory, Economic Times, and Inc42, and in July 2019, livemint reported UPI’s readiness to finally realise its global ambitions. A pilot project aimed at testing UPI as a preferred global payment product was initiated in the UAE and Singapore (since these 2 countries already have accepted RuPay cards) in October 2019, reports Economic Times. Also, for NRIs residing abroad (wanting to send money back to India), via tapping on the tourism sector, National Payments Corporation of India (NPCI) is focusing on amassing the opportunity offered by the burgeoning remittance market.
It’s worth noting here that in 2018, India dethroned China to claim the designation of being the No. 1 nation for remittances with a total of $69 billion being remitted by NRIs, according to the World Bank data, reported by Trak. There’s also active interest taken in UPI by global regulators and global companies, viz. Facebook, Xiaomi, Realme, and Google have begun entering the UPI payments space.Earlier to this, as precedence, the report of RBI’s (Reserve Bank of India) High-Level Committee on Deepening of Digital Payments had suggested to elevate UPI’s stature to the global level. In the report, the Nandan Nilekani Committee has proposed various options to take UPI global; these include the following: 1. modifying UPI protocols to facilitate support for currency conversion and unswervingly connecting UPI to global payments systems so as to facilitate instant, low-cost remittances over the UPI system. 2. UPI specifications and technologies were suggested to be licensed to operators globally to facilitate the protocol to spread beyond India. To make this happen, amendments in the Indian regulations are required to make it possible for Indians to use UPI while abroad.