With the UPI going global, US private banks may look at lapping up a connection with India's unique digital payments solution, said Federal Reserve Governor Christopher Waller on Wednesday. He said cross-border payment interlinking is one of the key areas outlined in the G20 roadmap. Addressing the 'Global Fintech Fest' in the financial capital, he said that although the US does not have enough banks connected to make a full-service product, "we have some private banks which can connect to the UPI," and for this, "we first need to build a compelling value proposition for such an integration.
Waller lauded India's DPI that has taken financial inclusion to millions in the country. "The technology-driven payments revolution in India has been enabled by a public-private partnership to build the 'technology stack' of digital platforms that has broadened financial inclusion and done so at low costs," Waller said in an address to the gathering.
The G20 roadmap, he said, touches on how the interplay between the public and private sectors could drive progress in cross-border payments as an issue hitherto touted by players within the payment industry for years-more affordable and timely cross-border payments for both consumers and businesses.
Interlinking arrangements would permit banks in various countries and users of domestic fast-payment systems to send payments to their counterparts through technical links between the different domestic payment systems, said Waller.
The US Fed will continue its engagement with international fora to improve the speed and efficiency of cross-border payments and to investigate the issues critical to interlinking payment systems. "I expect the technical capabilities, legal infrastructure, and use cases for faster cross-border payments will evolve, and I look forward to following the private-sector innovation that will emerge from stakeholders represented at this event," he said.
Earlier in the week, the RBI Governor Shaktikanta Das showcased India's UPI system as a plug-and-play solution for other countries so that the latter can facilitate quicker and cheaper cross-border remittances among the comity of nations. The Governor explained that the potential of the UPI system lies in graduating into a cheaper and quicker alternative to the available channels of cross-border remittances.
Growth in digital payments continues to surge, and UPI is now adding up to 6 million new users every month. The success of UPI in India has taken it toward global collaborations across many countries. Similarly, the NPCI has also set an ambitious target to achieve 1 billion UPI transactions per day in the coming years.
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