SUMMARY
The linkage of UPI and IPP will enable users in both the countries to make fast and cost-effective cross-border fund transfers
Earlier this year, a similar cross-border linkage between UPI and Singapore’s PayNow was completed
The development comes just a day after PM Modi announced in Paris that the UPI will now be available in France as well
In another step towards increasing the international usage of the Unified Payments Interface (UPI), the Reserve Bank of India (RBI) and the Central Bank of the UAE on Saturday (July 15) signed an agreement to link UPI with its UAE counterpart Instant Payment Platform (IPP).
The linkage of UPI and IPP will enable users in both the countries to make fast and cost-effective cross-border fund transfers.
It must be noted that the UAE is home to a large Indian expatriate community. The number of resident Indian nationals in the UAE are estimated to be at about 3.5 Mn. As such, the linkage of the digital-payment systems is expected to help these expats easily transfer money to their family and friends back home.
The UPI-IPP linkage agreement was part of a memorandum of understanding (MoU) signed between the RBI and the UAE’s central bank on payments and messaging systems. Overall, two MoUs were signed between the central banks during the visit of Prime Minister Narendra Modi to the UAE.
The first MoU aims to establish a framework for use of the Indian rupee and the UAE dirham for cross-border transactions. Besides the UPI-IPP linkage, the second MoU also aims to link the RuPay card switch of India with UAESWITCH and India’s Structured Financial Messaging System with the UAE’s messaging system.
UPI Continues To Spread Its Wings
The development comes just a day after PM Modi announced in Paris that UPI will now be available in France as well.
However, this was long in making. Last year, the National Payments Corporation of India (NPCI) and France’s Lyra Network signed an MoU for acceptance of India’s UPI and RuPay cards in France.
The developments are part of the government’s push to promote usage of UPI, a key part of the Centre’s India Stack. For this, the NPCI even formed a new arm, NPCI International Payments Limited, to deploy the digital-payments service globally.
Earlier this year, a similar cross-border linkage between UPI and Singapore’s PayNow was completed.
UPI is also accepted in a number of other countries including Nepal, Canada, Bhutan, among others.
Meanwhile, UPI logged a whopping 933 Cr transactions worth INR 14.75 Lakh Cr in the month of June 2023. PhonePe, Google Pay, and Paytm continued their dominance in the digital payments market in India, with CRED at a distant fourth place.
