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NPCI Pursues Real-Time Payment Connectivity Between Indian and US Banks

NPCI is in advanced talks with US and Indian banks to establish real-time payment connectivity, aiming to facilitate seamless transactions between the two countries. The initiative aligns with cross-border payment initiatives and global standards for improving payment systems.

The National Payments Corporation of India (NPCI) is in advanced discussions with banks in the United States and India to establish real-time payment connectivity between the two countries. The initiative, aimed at expanding cross-country payment systems, is a significant step forward for NPCI within the unified payments interface (UPI) ecosystem.

Collaborative Efforts:

NPCI is collaborating with both Indian and foreign banks, including those in the US, to create use-case models and conduct testing pilots for real-time payment linkage. The process involves engaging with major US banks to ensure comprehensive testing and validation of the proposed system.

Focus on Small Payments:

Given the absence of a nationwide system like NPCI’s UPI in the US, the initial focus will be on facilitating small consumer payments. While the system's real-time nature offers potential benefits, its scope initially will be limited in terms of quantity and value, with a gradual rollout focusing on small payments.

Leveraging Existing Capabilities:

US banks, particularly those with a significant consumer base, aim to collaborate with NPCI and American authorities to leverage existing capabilities. This collaboration is crucial for serving the large market for consumer payment flows between India and the US.

Cross-Border Initiatives:

The initiative aligns with the Indian government's efforts for cross-border real-time money transfers through UPI. NPCI's international arm, NIPL, is expanding the acceptance of BHIM UPI QR codes in various countries, facilitating seamless transactions for Indian travelers abroad.

Global Payment Standards:

Initiatives like these contribute to the G20’s goal of improving cross-border payments in terms of speed, affordability, and transparency. Cross-border transaction initiatives offer new possibilities and challenges for individuals and businesses, driving a shift in international payment dynamics.

Bharat Bill Payment System Expansion:

In addition to cross-border initiatives, NPCI is exploring opportunities to expand its services globally. In September 2023, NPCI was considering launching the Bharat Bill Payment System (BBPS) for Non-Resident Indians (NRIs) in the UK, further extending its reach beyond domestic borders.

Overall, NPCI's efforts to establish real-time payment connectivity between Indian and US banks mark a significant milestone in enhancing cross-border payment infrastructure and facilitating seamless transactions between the two nations.