India, Digital Payments, Global

A surge in e-commerce and declining cash usage during the COVID-19 pandemic have boosted India’s state-led shared payments infrastructure.

According to the National Payments Corporation of India (NPCI), the nation will have processed over $425 billion in commerce by the end of this year. Emboldened by growth and eyeing expansion, the United Payments Interface’s (UPI) umbrella organization is thinking about exporting the model to other countries.

Developed under state guidance and regulated by the country’s central bank, the Reserve Bank of India, the payments interface began as part of the larger India Stack project, which pooled application programming interfaces (APIs) that could be used by public and private actors to build digital infrastructure.

While UPI is one of the prominent applications of the stack, other services include a unique biometric ID system, known as Aadhar, and electronic document storage.

UPI enables both digital payments and peer-to-peer transfers for 200 banks that are part of the network, and for payment processors such as GooglePay. Put simply, UPI resembles a personal digital wallet that can be used to access and move around money from bank accounts. E-commerce platforms like Amazon and Flipkart have both integrated UPI, allowing residents to pay for goods directly using the platform.

This interoperability is a key part of the pitch being made by the National Payments Corporation of India, the umbrella rule-making body for UPI, in favor of exporting the payments model.

“We have started engaging with people overseas and the response has been very positive,†said Ritesh Shukla, CEO of NPCI’s international expansion subsidiary, speaking at a recent tech summit organized by Carnegie India and co-hosted by India’s Ministry of External Affairs. He added that the organization hopes to create an international product similar to UPI over the next couple of years.

Read more: India’s State-Regulated Digital Payments Network Is Dominated by Google and Walmart

While Shukla didn’t name any countries involved in the discussions, Bhutan launched a debit card tied to a similar network last month.

According to Shukla, NPCI’s approach to the export is likely to be two-pronged: It would help countries that do not have an existing payments system to build one, while for countries that already have some form of existing payments network NPCI would help them upgrade it until it more closely resembles the UPI with respect to inter-bank operability.

“You talked earlier about whether there will ever be another M-Pesa in Kenya, and this to me has the potential,†said Victor Malu, head of future financial systems at FSD Kenya, during the conference.

M-Pesa was rolled out in 2007 by Kenyan telecom provider Safaricom and offered people an alternate way to transfer money using text messages. Seen as one of the earlier steps towards financial inclusion through digitisation, M-Pesa is similar to Venmo but doesn’t require a bank account.

M-Pesa has about 24.5 million users in Kenya alone. But at the same time services like M-Pesa, and even bank accounts, are company-specific and can present hurdles when a user wants to move money from, for instance, a mobile account to bank account.

But before UPI can go abroad, some problems need to be sorted out. As the volume of digital payments jumped in India under COVID-19 restrictions, the network’s servers also began to feel the heat. According to NPCI data, the State Bank of India (SBI), which processes the largest chunk of UPI transactions, had a failure rate of 5.31% for the 510 million transactions it processed in September. These failures were due to technical issues.

Keeping UPI going when activity spikes also requires Indian banks to upgrade their back-end infrastructure. The UPI system gives banks little incentive to invest in improving the system because they don’t earn anything from the mostly small-ticket expenditures made using the service.

In the absence of architecture to reliably process transactions and the missing economic incentive for banks to build one, the payment network could run into adoption hurdles. If unresolved, these issues could also make it harder for the NPCI to export the network.

Du lịch nhật bản, hướng dẫn du lịch Nhật và đánh giá địa điểm Nhật Bản Japan travel news, japan travel guides, japan holiday destinations and japan reviews

RELATED NEWS

India’s Central Bank RBI Still Has ‘Major Concerns’ About Crypto After Saying Ban No Longer Valid

The governor of the Reserve Bank of India (RBI), Shaktikanta Das, has clarified the central bank’s position regarding cryptocurrency. His statements followed a notice published by the RBI telling banks that its crypto banking restriction is no longer valid and cannot be cited. RBI Still Has Major Concerns About Crypto RBI Governor Shaktikanta Das clarified […]

Xem chi tiết: India’s Central Bank RBI Still Has ‘Major Concerns’ About Crypto After Saying Ban No Longer Valid

India’s Central Bank RBI Confirms Crypto Banking Ban ‘No Longer Valid’ — Asks Banks to Stop Quoting It

Indian central bank, the Reserve Bank of India (RBI), has officially advised banks that its banking ban circular is no longer valid as it was set aside by the country’s supreme court more than one year ago. Despite the supreme court’s ruling, banks have been citing the RBI circular when dealing with cryptocurrency. RBI Tells […]

Xem chi tiết: India’s Central Bank RBI Confirms Crypto Banking Ban ‘No Longer Valid’ — Asks Banks to Stop Quoting It

Indian Government to Set up Panel of Experts to Take a Fresh Look at Regulating Cryptocurrencies: Report

The Indian government is reportedly looking to form a new “panel of experts†to focus on ways to regulate the cryptocurrency industry in the country. “There is a view within the government that the recommendations made by Subhash Garg are dated and a fresh look is needed at use of cryptos rather than a total […]

Xem chi tiết: Indian Government to Set up Panel of Experts to Take a Fresh Look at Regulating Cryptocurrencies: Report

Bitcoin Drops Below $40K, Crypto Economy Down 17%, Markets Lost $250 Billion Last Week

On Wednesday, cryptocurrency markets continue to drop lower in value, as the entire crypto-economy has plunged 17% below the $2 trillion mark and now rests at $1.801 trillion. Bitcoin, the leading cryptocurrency in terms of market capitalization, touched a high of $40,770 per unit at 4:48 a.m. (ET). A few hours after hitting that price […]

Xem chi tiết: Bitcoin Drops Below $40K, Crypto Economy Down 17%, Markets Lost $250 Billion Last Week

Mastercard Payment Index: More Consumers in Three African Countries Plan to Use Crypto Based Payment Methods

According to a recent Mastercard payment index report, the Covid-19 related lockdowns helped spread the use of cryptocurrency in three African countries, namely Nigeria, Kenya, and South Africa. The report also reveals that a greater number of consumers from these countries are “likely to use one emerging payment method in the coming year.†More Respondents […]

Xem chi tiết: Mastercard Payment Index: More Consumers in Three African Countries Plan to Use Crypto Based Payment Methods

Former Finance Secretary Urges Indian Government to Encourage Crypto Services, Regulate Cryptocurrencies

Former Finance Secretary Subhash Chandra Garg, who headed the committee that drafted India’s cryptocurrency bill, says that the government should not ban cryptocurrencies but regulate them instead. He further urges the government to encourage crypto services. Indian Government Should Regulate Cryptocurrencies and Encourage Crypto Asset Services Subhash Chandra Garg said Thursday at a virtual event […]

Xem chi tiết: Former Finance Secretary Urges Indian Government to Encourage Crypto Services, Regulate Cryptocurrencies

Former Finance Secretary Urges Indian Government to Encourage Crypto Services, Regulate Cryptocurrencies

Former Finance Secretary Subhash Chandra Garg, who headed the committee that drafted India’s cryptocurrency bill, says that the government should not ban cryptocurrencies but regulate them instead. He further urges the government to encourage crypto services. Indian Government Should Regulate Cryptocurrencies and Encourage Crypto Asset Services Subhash Chandra Garg said Thursday at a virtual event […]

Xem chi tiết: Former Finance Secretary Urges Indian Government to Encourage Crypto Services, Regulate Cryptocurrencies

National Payments Corporation of India Says It Will Not Ban Cryptocurrencies Through UPI

India’s payments authority, the National Payments Corporation of India, has reportedly said that it will not ban cryptocurrency transactions. Banks are to make their own decision whether to allow crypto transactions. The National Payments Corporation of India (NCPI), has refused to ban cryptocurrency transactions, local media reported Thursday. NCPI runs the Unified Payments Interface (UPI), […]

Xem chi tiết: National Payments Corporation of India Says It Will Not Ban Cryptocurrencies Through UPI

Vitalik Buterin and Balaji Srinivasan Donate to Indian Covid Relief Fund Despite Country’s Intentions to Ban Cryptos

Coinbase Opens Office in India Despite Crypto Ban Reports

Coinbase Opens Office in India Despite Crypto Ban Reports

Report: Asia’s Cryptocurrency Landscape the Most Active, Most Populous Region ‘Has an Outsize Role’

Simplex and Skrill Broaden Cryptocurrency Convenience by Launching New Onramp Solutions

India Mulls Imposing 18% Tax on Bitcoin Transactions

Vauld Raises $2 Million to Establish Stronghold in India

Los argentinos están cambiando su obsesión histórica con el dólar por DAI

Other Articles