Post by : Badri Ariffin

In a groundbreaking move for international digital transactions, the Reserve Bank of India (RBI) revealed on Friday that India’s Unified Payments Interface (UPI) will now connect with the Eurosystem’s TARGET Instant Payment Settlement (TIPS). This strategic initiative aims to streamline and expedite cross-border remittances from India to the Euro Area.

Collaborating with NPCI International Payments Limited (NIPL), the RBI has been actively engaging with the European Central Bank (ECB) to establish this crucial connection. With TIPS integrated into UPI, users can execute money transfers in real time, effectively bridging the gap between India and Europe.

This integration forms a part of the RBI’s larger vision to expand the global reach of UPI. Previously, the central bank has explored opportunities to connect UPI with various international fast payment networks, aiming to render cross-border transactions more cost-effective, quicker, and transparent.

The UPI-TIPS initiative is also aligned with the G20 agenda to enhance the efficacy of cross-border payments. By lowering transaction fees and processing durations, it stands to significantly benefit both individual senders and businesses engaged in remittances between India and Europe.

Meanwhile, nations around the world are observing India’s real-time payment advancements. For example, Peru plans to launch a UPI-inspired digital payment solution by 2024, marking it as the first South American country to adopt India’s UPI technology. This initiative follows a collaboration between NIPL and the Central Reserve Bank of Peru (BCRP) for implementing instant digital payment methods, showcasing India’s rising prominence in the global fintech ecosystem.

Both the RBI and NIPL have reiterated their commitment to facilitating a smooth operational rollout of UPI-TIPS. They are focused on key elements such as technical integration, settlement processes, and risk management frameworks to ensure a secure and seamless remittance experience for users.

This linkage marks another significant milestone for India’s UPI as it evolves toward a global benchmark in digital payments, connecting continents and making international money transfers simpler and more efficient than ever before.

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