NPCI to launch real-time payment link between India and US

Specifically, the National Payments Corporation of India (NPCI) is reportedly in discussions with Indian and US banks to establish a real-time payment link between the two countries, as per a report from the Economic Times. The initiative seeks to utilize NPCI's expertise in cross-border payments. NPCI is said to be collaborating with Indian banks familar with the Unified Payments Interface (UPI) and foreign banks to develop models and conduct pilot tests. 

Additionally, NPCI is engaging with FedNow, the real-time payment service launched by the US Federal Reserve in July last year, or its UPI equivalent. The proposed payment model between India and the United States is expected to focus initially on small consumer transactions due to the absence of a nationwide system similar to UPI in the US. Transactions under this model are likely to be limited in scale and value, with only modest payments permitted initially. 

Under this model, transactions involving sending or receiving money from relatives would necessitate the involvement of a large Indian bank for Indian consumers, while in the US, individuals can use American banks for such transactions.

What else is the NPCI working on? 

In January 2024, Google India Digital Services signed a Memorandum of Understanding (MoU) with NPCI International Payments (NIPL), a subsidiary of NPCI, to expand UPI internationally. 

Unified Payments Interface (UPI) is a real-time payment system in India, developed by the National Payments Corporation of India. It enables instant and secure money transfers between banks through mobile devices, streamlining transactions, and contributing to the widespread adoption of digital payments in the country. 

The MoU has three key objectives. First, it seeks to broaden the use of UPI payments for travellers outside of India, enabling them to conveniently make transactions abroad. The MoU also intends to assist in establishing UPI-like digital payment systems in other countries, providing a model for seamless financial transactions. 

Lastly, it focuses on easing the process of remittances between countries by utilising the UPI infrastructure, thereby simplifying cross-border financial exchanges, NPCI said in a statement.