Looking at the popularity of the Unified Payment Interface (UPI), the National Payments Corporation of India this year decided to take the mode of payment to the international market. Taking the initiative one step further, the government has now set up a subsidiary to export the services to overseas banks and government.
The Reserve Bank of India (RBI) governor, Shaktikanta Das, made the announcement on December 16 at India Economic Conclave. Das added that the government is also looking at other business propositions that come with the export of the services.
The announcement comes two days after the global tech giant Google wrote to United States Federal Reserve Bank, introducing FedNow, a new interbank real-time gross settlement (RTGS) service that is on the lines of India-based UPI. Google, in a letter to the US’s central bank, pitched FedNow as a mode of payments that supports inclusive and open digital payments.
In the letter, Google had also elaborated on its experience of setting up a UPI-enabled digital payments platform Google Pay in India, which was launched in September 2017. Google assured that FedNow will allow financial institutions to deliver end-to-end faster payment services to their customers.
According to a study by Assocham-PWC India, India’s digital payments in terms of transaction value are expected to grow at a compounded annual growth rate (CAGR) of 20.2% between 2019 and 2023.
Another report by the Boston Consulting Group (BCG) notes that the UPI will dominate the payments space with almost 59% payment transactions in India. The trend can also be seen in the rate at which UPI transactions are growing. In October 2019, UPI payments crossed the 1.15 Bn with transactions worth INR 1,913,600 Cr.
On a month-on-month (MoM) bases, UPI recorded a 20% hike from 955.02 Mn transactions worth INR 1,61,456.56 Cr in September 2019. Even though, if compared to the MoM growth between August 2019 and September 2019, UPI transactions had only seen a 4.5% jump from 918.35 Mn transactions worth INR 1,54,504.89 Cr. In November 2019, UPI recorded 1.22 Bn transactions worth INR 1,89,224 Cr.