Report: NPCI to create real-time payment link between India and US

The National Payments Corporation of India (NPCI) is in advanced discussions with Indian and US banks to establish a real-time payment link between the two countries, as per a report by Economic Times. The initiative aims to leverage NPCI’s expertise in cross-border payments and is collaborating with Indian banks experienced in Unified Payments Interface (UPI) and foreign banks to develop models and conduct pilot tests.

NPCI, which is backed by the Reserve Bank of India (RBI), is engaging with FedNow or its UPI equivalent, as launched by the US Federal Reserve in July last year. The proposed payment model between India and the United States would initially focus on small consumer transactions, due to the absence in the US of a nationwide system akin to UPI in India. The transactions would be limited in scale and value, with initially only ‘modest’ payments being allowed.

The report also highlighted that under the proposed payment model, transactions involving a transfer of money from a relative that is not part of a consumer bank in India cannot be done through a foreign bank. In the United States, a person can use an American bank to send or receive money from there.

This potential real-time payment link between India and the US could revolutionize the way cross-border transactions are conducted and is a significant development in the world of digital payments.

NPCI was incorporated in 2008 as an umbrella organization for operating retail payments and settlement systems in India. It has created a robust payment and settlement infrastructure in the country. This latest initiative underscores NPCI’s ambition to further enhance its capabilities and establish itself as a major player in the global payment ecosystem.