The Reserve Bank of India (RBI) has entered the realisation phase of interlinking India’s Unified Payments Interface (UPI) with the European Central Bank’s TARGET Instant Payment Settlement (TIPS) system, marking a transformative step towards enabling faster, cheaper, and more transparent cross-border payments between India and the Euro Area.
This strategic move, supported by NPCI International Payments Limited (NIPL), aims to facilitate seamless real-time remittances benefiting travellers, expatriates, merchants, and businesses.
It aligns with the G20 roadmap for enhancing global remittance corridors and will expand India’s UPI presence, currently operational in 13 countries, to include Europe shortly.
What UPI-TIPS Means for Users
The interlinking of UPI with TIPS promises to change the landscape of international payments, making it vastly more efficient and user-friendly. UPI, India’s widely adopted instant payment platform launched in 2016, already supports real-time, interoperable transactions domestically and has expanded internationally to countries like Singapore, UAE, and Japan.
With the integration of TIPS, Europe’s instant payment system, Indian and European users will be able to send and receive money instantly across borders, bypassing cumbersome and costly intermediaries. This not only reduces transaction costs but enhances transparency and convenience.
RBI, NIPL, and the European Central Bank are currently working on the technical integration, risk management, and settlement mechanisms to operationalise this linkage.
M Nagaraju, Secretary of the Department of Financial Services, Ministry of Finance, emphasised that the initiative is part of a broader strategy to internationalise UPI, with plans underway to extend its footprint further to other countries.
NIPL is also collaborating with nations such as Namibia, Trinidad and Tobago, and Peru to develop UPI-like payment infrastructures, showing India’s ambition to be a leader in global digital payment systems.
UPI’s Journey to Globalisation
UPI revolutionised India’s payments ecosystem by providing an instant, 24/7, interoperable digital payment method across banks and apps, enabling seamless peer-to-peer and merchant transactions through simple virtual payment addresses and QR codes.
Its success domestically has prompted policymakers and stakeholders to push for its uptake on an international scale to support India’s growing diaspora, inbound tourism, and cross-border trade.
The integration with TIPS represents a critical juncture in this journey. While India and Europe had initiated indirect UPI acceptance for Indian tourists in Europe through partners like France-based Worldline, this new system-level interlinking will enable direct real-time settlement of funds between India and Euro Area countries.
This move was also accelerated by the global rise in digital commerce and the G20’s focus on reducing the cost and friction of remittances, underlining India’s technological leadership in payments.
The Logical Indian’s Perspective
The RBI’s initiative to link UPI with Europe’s TIPS system is more than a technological upgrade; it is a gesture towards fostering global understanding, economic cooperation, and financial inclusion.
By simplifying cross-border payments, the initiative eases the financial burden on migrant workers, expatriates, tourists, and small businesses, strengthening ties between nations through everyday interactions.
This move resonates deeply with The Logical Indian’s commitment to empathy, harmony, and inclusion.
Technology, when leveraged responsibly and thoughtfully, can be a powerful tool in breaking down barriers, enabling dialogue, and supporting peaceful coexistence.
