The Reserve Bank on Thursday said the internationalization of the unified payments interface (UPI) system is a work in progress as it works towards linking it with more and more overseas counterparts, including some in the West and Japan. On February 21, 2023, the RBI announced the first linkage of UPI by integrating it with Singapore's Paynow, paving the way for faster and more transparent remittances between the two countries.
Reserve Bank Governor Shaktikanta Das launched the new linkage in association with his Singaporean counterpart Ravi Menon, who is the managing director of the Monetary Authority of Singapore.
Announcing the third monetary policy review, Governor Shaktikanta Das said the RBI was planning to use artificial intelligence in UPI payments and also to deploy near-field communication (NFC) technology to be used in offline payments in UPI-Lite.
It also enhanced the transaction limit for small-value digital payments to Rs 500 from Rs 200 on UPI Lite.
On UPI linkages with more countries, the deputy governor T Rabi Shankar told reporters that "such integration has already been done with Singapore. And recently we signed an agreement with the UAE's payment system Integrated Payment Platform (IPP) to link UPI with their payment system.
"It is a work in progress and it will happen in the coming months and discussions are underway with a few other countries also for linking their payment systems with ours, including some advanced economies which have evinced interest in linking to UPI," he said.
Governor Das chipped in saying "UPI has now become internationally recognised. I am not saying it myself, but it is recognised very widely, and that it is perhaps the most efficient and advanced payment system in the world.
"At the recent G20 finance ministers and governors meeting, UPI was widely recognised. So this is a work in progress. We are already in discussion with a few other countries and it will happen soon."
To a question from a Japanese journalist whether some officials from the world's third-largest economy has contacted RBI for UPI linkage, Shankar answered in the affirmative saying a Japanese minister has contacted us.
"We are happy that a country like Japan which is an advanced economy, is showing interest in the UPI. Currently, it is only at an intention stage as the contact was mostly exploratory level. NPCI is talking to the relevant Japanese agencies," the deputy governor said.
AK Goel, the chairman of the Indian Banks' Association (IBA) said more user-friendly measures for UPI by way of conversational payments in UPI and further promoting the UPI-Lite by facilitating offline transactions using near field communication are expected to widen the coverage of UPI.
Source Name : Economic Times