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MUMBAI — As the Unified Payments Interface (UPI) goes global, the US private banks might explore connecting with India’s unique digital payments solution, Federal Reserve Governor Christopher Waller said here on Wednesday, adding that cross-border payment interlinking is one of the key areas outlined in the G20 roadmap.
Speaking at the 'Global Fintech Fest' in the financial capital, he said the US does not have enough banks connected to make a full-service product but “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 praised India's digital payments infrastructure (DPI) that has brought 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 told the gathering.
Touching on how interplay between the public and private sectors may be the key to advancing cross-border payments, the Fed governor said that the G20 roadmap addresses a new topic that payments industry stakeholders have been circling around for years — more cost-effective and timely cross-border payments for consumers and businesses.
“Interlinking arrangements would allow banks in different countries, who are users of domestic fast payment systems, to send payments to each other through technical connections between their respective 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 mentioned.
Earlier this week, RBI Governor Shaktikanta Das offered India’s UPI system as a plug-and-play system for other countries to facilitate quicker and cheaper cross-border remittances among the community of nations.
The RBI Governor explained that the UPI system has the potential to evolve into a cheaper and quicker alternative to the available channels of cross-border remittances.
The digital payment growth continues to surge and UPI is now adding up to 6 million new users every month. The UPI's success in India has led to global collaborations across several countries. NPCI has also set an ambitious target of achieving 1 billion UPI transactions per day in the coming years.