Source: BS
Context:
The Reserve Bank of India (RBI), NPCI International Payments Ltd. (NIPL), and the European Central Bank (ECB) have agreed to begin the realisation phase of linking India’s Unified Payments Interface (UPI) with the TARGET Instant Payment Settlement (TIPS) system of the Eurozone.
Key Highlights:
- RBI & NIPL Engagement: The RBI, along with NPCI International Payments Ltd (NIPL), has been collaborating with the European Central Bank (ECB) to operationalise the UPI–TIPS link.
- Implementation: The next phase involves technical integration, risk management, and settlement arrangements for seamless cross-border payments.
- NIPL Role: NIPL, a wholly-owned subsidiary of NPCI, promotes India’s home-grown payment systems, such as UPI and RuPay, overseas.
- Current UPI International Reach:
- UPI acceptance enabled in Singapore, Bhutan, Nepal, Sri Lanka, UAE, Mauritius, Qatar, France.
- 2 million+ international merchants onboarded for UPI acceptance.
- India supports countries like Namibia, Trinidad and Tobago, Peru to develop UPI-like systems.
- Talks underway with 7–8 more countries to expand UPI’s global reach.
About TARGET Instant Payment Settlement (TIPS)
- TIPS is a real-time payment system operated by the Eurosystem, which is the central banking system of the Euro Area.
- It allows instant settlement of payments in euros, 24/7, across participating banks in Europe.
Key Features:
- Instant Payments: Transfers between banks happen in seconds, any time of the day or week.
- Final and Irrevocable Settlement: Payments processed through TIPS are final, reducing settlement risk.
- Cross-Border Capability: TIPS supports payments across Euro Area countries, enabling seamless pan-European transfers.
- Central Bank Operated: Managed by Eurosystem (ECB and national central banks), ensuring safety and trust.
- Integration with Other Systems: Can be linked with other payment systems (like India’s UPI) to enable cross-border instant transfers.
