India plans to roll out its digital payment model globally as online payments boom in one of the economies worst affected by the COVID-19 epidemic, UK media reported.
The FINANCIAL Times website reported on July 25 that since its launch in 2016, India's "UPI" has pushed online payments in the country of nearly 1.4bn people. With the system, people can make inexpensive, instant transfers across bank accounts and pay for everything from groceries to online services.
Supporters say UPI promotes financial inclusion in India, where hundreds of millions of people remain without bank accounts. Supporters argue that UPI is more advanced than similar systems in rich countries.
UPI has also attracted a lot of investment, with Google partnering with walmart, an Indian e-commerce startup, and others launching apps based on UPI.
The report noted that the number of transactions on the platform reached a record 1.34 billion in June as the coVID-19 epidemic spread, which in turn forced Indians to stay socially distant and avoid paying in cash.
UPI was set up by the Reserve Bank of India and managed by the National Payment Corporation, owned by a consortium of local lenders.
Following a pilot project in Singapore, THE Company has held preliminary talks with the Bank for International Settlements, the World Bank and the Bill and Melinda Gates Foundation to explore possible collaboration, said Dilip Asbeh, CHIEF executive of the National Payments Corporation of India.
UPI's strength, he says, is that it appeals to all sectors of India's divided economy, from wealthy consumers to poor communities.
UPI may also prove useful for transactions and remittances in countries with large Indian diasporas. India's National Payments Corp. set up an international subsidiary in April, but Mr. Asby said the Singapore pilot program is aimed primarily at Indians resident in the Southeast Asian country, and trading volumes are limited because of travel restrictions. "This is going to be an ongoing process," he said.
Persuading other countries to accept THE UPI may also be difficult, as governments want to be able to review the infrastructure in order to build trust, says Neal Shah, an analyst at The U.S. -based Kent Point Research Company. "There are huge opportunities," he said. The challenge is obviously the trust side."
Upi-based platforms, such as the payment card scheme RuPay, have reportedly been supported in India as an alternative to Visa and mastercard. U.S. companies such as Visa And mastercard inc. have become targets of Indian policy, with the government asking them to stop transferring financial data outside India.
India has been promoting platforms like UPI to accelerate financial inclusion among a large segment of the population that has long been excluded from the banking system, the report said.