UPI has not just digitised payments but made access synonymous with public service, delivered on financial inclusion through ubiquity, low cost and scale.
India's payments revolution combines soft and hard power, a rare feat in a field of viral innovation. Abundant engineering talent focused on making daily money chores easier and safer has created a population-scale model of unique value to country and consumers - and now the world.
This new financial ecosystem is being exported to adopters in the 'global south', lending lustre to Indian leadership while also drawing global capital to fuel the next wave of Indian innovation. Over the past decade, India has successfully demonstrated that bold ambition and policy is the handmaiden of entrepreneurial technological innovation. UPI, the core payments platform at the heart of India's payments revolution, is the outcome.
UPI has not just digitised payments but made access synonymous with public service, delivered on financial inclusion through ubiquity, low cost and scale. It has set new standards for speed of delivery and affordability. The next frontier is clear: cross-border payments.
In Payments Vision 2025, RBI articulated an ambition aligned with G20 roadmap: make cross-border transactions faster (75% of payments to be credited within 1 hr), cheaper (average remittance costs reduced to 3% or below), more transparent and more accessible. That ambition is not about convenience. It is about competitiveness.
India is the world's largest recipient of remittances. Its global diaspora sends home $135 bn annually. Amid geopolitical uncertainty, India has also ticked off a flurry of trade deals, with the world's largest economic blocs like the EU and US (interim deal, formal signing yet to happen), but also with smaller partners such as Britain and Oman.
These are good for India for two reasons:
For exporters, predictability of settlement affects working capital cycles. For families dependent on remittances, clarity on fees and forex rates determines how much reaches home. For India's growing outward investors, seamless capital mobility enhances global integration.
Encouragingly, foundations for progress, such as better and more transparent data, are in place. Global adoption of richer data standards such as ISO 20022 is improving transparency and reducing friction. The objective is straightforward: provide upfront certainty on cost (no hidden fee), enable real-time tracking, strengthen consumer protection and, where infrastructure allows, instant settlement.
Tech will not solve the problem. Research shows that much of the delay in cross-border transactions occurs in the 'last mile', after funds reach the beneficiary bank. Regulatory reporting requirements, compliance checks, fragmented infrastructures and time-zone differences introduce friction. Addressing these challenges requires coordinated action between regulators, banks and payment system operators across jurisdictions.
RBI has set the ball rolling with proposed measures aimed at accelerating inward remittances and improving transparency around costs associated with cross-border payments. India has successfully demonstrated that ecosystem-wide coordination is possible. The success of UPI was not just technological but institutional. It aligned policy, infrastructure and market participants toward a shared outcome.
A similar approach to cross-border payments could deliver outsized benefits. As India deepens trade ties, negotiates digital economy partnerships and explores international linkages for UPI, globally interoperable standards will become even more critical. Efficient reuse of existing cross-border infra combined with aligned service level protocols can accelerate progress without fragmenting the system.
The prize is significant. Faster and more predictable cross-border payments reduce transaction costs, improve liquidity management for businesses, enhance remittance flows and ultimately support economic growth.
India's domestic payments transformation is a global case study. Extending that leadership beyond borders would reinforce its position not only as a digital payments pioneer, but as a key architect of the next generation of global financial connectivity. The ambition is clear: ensure that sending money across continents is eventually as simple and reliable as sending it across town.
This new financial ecosystem is being exported to adopters in the 'global south', lending lustre to Indian leadership while also drawing global capital to fuel the next wave of Indian innovation. Over the past decade, India has successfully demonstrated that bold ambition and policy is the handmaiden of entrepreneurial technological innovation. UPI, the core payments platform at the heart of India's payments revolution, is the outcome.
UPI has not just digitised payments but made access synonymous with public service, delivered on financial inclusion through ubiquity, low cost and scale. It has set new standards for speed of delivery and affordability. The next frontier is clear: cross-border payments.
In Payments Vision 2025, RBI articulated an ambition aligned with G20 roadmap: make cross-border transactions faster (75% of payments to be credited within 1 hr), cheaper (average remittance costs reduced to 3% or below), more transparent and more accessible. That ambition is not about convenience. It is about competitiveness.
India is the world's largest recipient of remittances. Its global diaspora sends home $135 bn annually. Amid geopolitical uncertainty, India has also ticked off a flurry of trade deals, with the world's largest economic blocs like the EU and US (interim deal, formal signing yet to happen), but also with smaller partners such as Britain and Oman.
These are good for India for two reasons:
- Deepen our foothold in global commerce - India accounts for less than 2% of global traded merchandise.
- Trade pacts will boost MSMEs, their role in international supply chains, augmenting jobs.
For exporters, predictability of settlement affects working capital cycles. For families dependent on remittances, clarity on fees and forex rates determines how much reaches home. For India's growing outward investors, seamless capital mobility enhances global integration.
Encouragingly, foundations for progress, such as better and more transparent data, are in place. Global adoption of richer data standards such as ISO 20022 is improving transparency and reducing friction. The objective is straightforward: provide upfront certainty on cost (no hidden fee), enable real-time tracking, strengthen consumer protection and, where infrastructure allows, instant settlement.
Tech will not solve the problem. Research shows that much of the delay in cross-border transactions occurs in the 'last mile', after funds reach the beneficiary bank. Regulatory reporting requirements, compliance checks, fragmented infrastructures and time-zone differences introduce friction. Addressing these challenges requires coordinated action between regulators, banks and payment system operators across jurisdictions.
RBI has set the ball rolling with proposed measures aimed at accelerating inward remittances and improving transparency around costs associated with cross-border payments. India has successfully demonstrated that ecosystem-wide coordination is possible. The success of UPI was not just technological but institutional. It aligned policy, infrastructure and market participants toward a shared outcome.
A similar approach to cross-border payments could deliver outsized benefits. As India deepens trade ties, negotiates digital economy partnerships and explores international linkages for UPI, globally interoperable standards will become even more critical. Efficient reuse of existing cross-border infra combined with aligned service level protocols can accelerate progress without fragmenting the system.
The prize is significant. Faster and more predictable cross-border payments reduce transaction costs, improve liquidity management for businesses, enhance remittance flows and ultimately support economic growth.
India's domestic payments transformation is a global case study. Extending that leadership beyond borders would reinforce its position not only as a digital payments pioneer, but as a key architect of the next generation of global financial connectivity. The ambition is clear: ensure that sending money across continents is eventually as simple and reliable as sending it across town.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Kiran Shetty