National Payments Corporation of India (NPCI) and banks in the US and India are in advance stages of discussions to flesh out a real-time payment linkage between the US and India, as per reports.
The plan seeks to build on the domestic payments body’s inroads in setting up cross-country systems.
In the ecosystem of the Unified Payments Interface (UPI), the NPCI is working with Indian banks that have experience with the system as well as foreign banks to develop use-case models and testing pilots, as per reports.
FedNow is a real-time payment service created by the US Federal Reserve, launch in July 2023.
The current focus is on building connectivity which would make any propose collaboration commercially viable, as per reports.
Given that the US does not yet have a nationwide system similar to what the NPCI has done with the UPI in India, the model would initially focus on small consumer payments.
For US banks, which already have a large share of US-based consumer wallets use for payments, the idea is to partner with the new model being propose by the NPCI and American authorities to leverage the existing capabilities.
Also, large local banks in India and the US would also need to step in to cater to the huge market for consumer payments flows between the two nations.
As per reports in November 2023, Reserve Bank of India was in talks with counterparts in the US and Hong Kong to assess the feasibility of cross-border settlements.
An internal RBI working group has exploring the best available technology to develop a roadmap of how such transactions can take place directly between two countries.
While on 12th February 2024, a virtual launch of RuPay cards and UPI connectivity between India and Mauritius, as well as UPI connectivity between India and Sri Lanka was announce by the RBI.
