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India is actively engaged in discussions with several African nations, including Namibia, Mozambique, and Kenya, as well as fellow BRICS members, to facilitate the expansion of its Unified Payments Interface (UPI) for cross-border transactions.
The Indian government is spearheading efforts to broaden the reach of its Unified Payments Interface (UPI) in Africa through commercial partnerships between payment platforms. According to reports by the Indian business publication, Mint, India is in discussions with “multiple African countries” that include Namibia, Mozambique, and Kenya.
Ritesh Shukla, International CEO of the National Payments Corporation of India (NPCI), stated, “Many countries around the world face challenges similar to those we encountered prior to the emergence of UPI. These challenges revolve around financial inclusion, supporting rural economies, fostering fintech incubation, enhancing transparency, and other factors.”
Shukla elaborated, “We are exploring collaborations with these nations to assist them in creating their own versions of UPI in a manner that preserves their sovereignty.”
Understanding the Indian UPI
The National Payments Corporation of India (NPCI) initiated the pilot launch of UPI in April 2016. UPI serves as a platform that consolidates multiple bank accounts into a single mobile application offered by participating banks. It combines various banking functionalities, facilitates seamless fund transfers, and supports merchant payments within a unified framework. Additionally, UPI caters to “Peer to Peer” collect requests, which can be scheduled and paid based on individual requirements and convenience.
Currently, UPI boasts approximately 300 million users and 500 million merchants who employ UPI for receiving payments for their businesses, as reported by local media. It is considered the most popular method for online transactions in India.
Research conducted by GlobalData highlights a decline in cash transactions in India, dropping from 90% of the total volume in 2017 to less than 60% in 2021.
Recently, NPCI established a connection with Singapore’s PayNow system, enabling transfers on the PayNow Virtual Payment Address (VPA) to be treated the same as domestic transfers on UPI. This development allows an Indian tourist in Singapore to seamlessly use UPI for transactions, including purchasing a coffee or a television. Forbes India reported that the PayNow-UPI linkage represents India’s first cross-border, real-time system linkage and Singapore’s second. It is also distinguished as the world’s inaugural feature integrating cloud-based infrastructure and participation by non-bank financial institutions, as noted by Singapore’s Prime Minister, Lee Hsien Loong.
Ritesh Shukla further explained, “We have around 30 million Indians residing outside India, who collectively send approximately $100 billion annually. The current experience is highly fragmented, depending on the region of the world in which you reside. We are exploring ways to standardize this entire user experience.”
The UPI technology is also in the process of expanding to countries such as France, the United Arab Emirates, and Sri Lanka.
Promoting Global Adoption Through BRICS
During the recently concluded BRICS summit held in Johannesburg, Indian Prime Minister Narendra Modi expressed India’s willingness to collaborate with BRICS nations in the area of UPI technology. The BRICS group comprises Brazil, Russia, India, China, and South Africa. Notably, BRICS has welcomed six new member states, including Saudi Arabia, Iran, Ethiopia, the United Arab Emirates, Argentina, and Egypt.
Modi highlighted, “UPI is used at all levels, from street vendors to large shopping malls. Today, among all countries in the world, India is the country with the highest digital transaction volume.”
He underscored the transformative impact of technology on financial inclusion in India, particularly in rural areas, saying, “Through the use of technology, India has taken a big leap in financial inclusion, benefiting our rural population. Over $360 billion has been transferred to beneficiaries through our direct-benefit-transfer model.”
Furthermore, India plans to leverage its ongoing presidency of the G20 forum to present its digital infrastructure as a model to other nations. The G20 represents a consortium of the world’s largest economies, established in 1999.
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