A surge in e-commerce and declining cash usage during the COVID-19 pandemic have boosted India’s state-led shared payments infrastructure.
According to the National Payments Corporation of India (NPCI), the nation will have processed over $425 billion in commerce by the end of this year. Emboldened by growth and eyeing expansion, the United Payments Interface’s (UPI) umbrella organization is thinking about exporting the model to other countries.
Developed under state guidance and regulated by the country’s central bank, the Reserve Bank of India, the payments interface began as part of the larger India Stack project, which pooled application programming interfaces (APIs) that could be used by public and private actors to build digital infrastructure.
While UPI is one of the prominent applications of the stack, other services include a unique biometric ID system, known as Aadhar, and electronic document storage.
UPI enables both digital payments and peer-to-peer transfers for 200 banks that are part of the network, and for payment processors such as GooglePay. Put simply, UPI resembles a personal digital wallet that can be used to access and move around money from bank accounts. E-commerce platforms like Amazon and Flipkart have both integrated UPI, allowing residents to pay for goods directly using the platform.
This interoperability is a key part of the pitch being made by the National Payments Corporation of India, the umbrella rule-making body for UPI, in favor of exporting the payments model.
“We have started engaging with people overseas and the response has been very positive,” said Ritesh Shukla, CEO of NPCI’s international expansion subsidiary, speaking at a recent tech summit organized by Carnegie India and co-hosted by India’s Ministry of External Affairs. He added that the organization hopes to create an international product similar to UPI over the next couple of years.