NPCI set to take UPI success to the rest of Asia in 2021

NPCI set to take UPI success to the rest of Asia:

The National Payments Corporation of India (NPCI) and Kansas fintech firm Euronet have submitted a joint bid to the Central Bank of Myanmar to build the country’s proposed real-time retail payment system.

UPI – India’s Success Story

The Indian payment system, Unified Payment Interface (UPI), has revolutionized the payment transfer system and is also moving internationally.

 In the latest development, WhatsApp in India, which has struggled for months to include a UPI payment feature, finally got the approval to go ahead with UPI. The NPCI approval comes on the same day that it limits the transactions that a third-party app like WhatsApp Pay can do to 30% of the total volume in the UPI network. The measure is intended to allay fears of possible monopolies.

Therefore, this NPCI movement leads to:

1. 5% of WhatsApp users in India can start using WhatsApp Pay

2. A UPI app can only handle 30% of the total payment volume

The NPCI move also comes just days after UPI traded $2 billion a month to bolster its position as the country’s premier retail channel. In October, UPI processed 2.07 billion transactions worth 3.86 lakh crore.

 Launched in 2016, UPI has achieved phenomenal success across the country. Developed by the National Payments Corporation of India (NCPI), UPI is India’s real-time mobile payment system. Regulated by the Reserve Bank of India, the interface facilitates interbank transactions by linking multiple bank accounts to a single mobile app, allowing instant money transfer and instant payment 24 hours a day, 7 days a week. Users can link their bank accounts to various peer-to-peer (P2P) payment applications such as Paytm, Google Pay, PhonePe, MobiKwik, and HMI (NCPI’s P2P application).

 Transaction numbers skyrocketed as payment service providers built their UPI-based platforms and quickly adapted to customers. UPI has significantly placed India on the world map with Indians transferring money using QR codes and various methods while most countries still use traditional methods. Card payments are predominant in developed countries, while checks are still widely used in many European countries. China has AliPay and Wechat, which are perfect but not as simple as UPI.

NPCI CBM Offer

NPCI is looking for export opportunities to build retail payment gateways in Asian countries amid growing global interest in digital payments.

 According to the Economic Times, NPCI has made an offer to the Central Bank of Myanmar (CBM) to build the country’s real-time retail payment system and QR code generation and storage system. The offer was made by NPCI International (NIPL), a newly established subsidiary of NPCI, in partnership with US payment company Euronet. NIPL was founded in August 2020 to bring NPCI’s technical expertise related to retail payment systems internationally.

 Earlier this year, CBM announced plans to modernize its existing payment infrastructure over the next two years and establish a real-time retail payment system, including the creation of an automated cleaning company. CBM currently has a central liaison service, the Myanmar Payment Union (MPU), which handles interoperable transactions for all ATMs, POS devices, and e-commerce transactions with debit and credit cards. However, the MPU, which was established in 2012, is slowly stabilizing and is linked only to the country’s banks.

In accordance with the Myanmar National Payments System Strategy 2020-2025, payment service providers in Myanmar, with the support of the CBM, have agreed to implement a common standardized QR code, the Myanmar Rapid Response Code (MMQR). MMQR’s technical specifications have been approved by local banks, international payment schemes, national e-money issuers, and MPUs.

The CBM has determined that the MMQR must accept payments through local and international payment systems, electronic wallet providers, and banks. The new retail payment system must be interoperable, provide broad access, integrate international payments and go through all QR code-initiated transactions in the country.

 The CBM project has received recognition from the World Bank and if NPCI can successfully implement its skills, it could be an important step towards its international ambitions. However, according to sources, the offer could face strong competition from global payment giants, including Mastercard and Visa, who have also expressed interest in the project.

 But if NIPL wins the tender, it will be the start of many international projects that NPCI has seen in the Asian market. Several economies, including Malaysia, the United Arab Emirates, and Singapore, are on the verge of massive digitalization and are trying to build interoperable UPI networks.

world attention

NPCI explores opportunities to successfully export UPI technology abroad to enable fast and efficient digital payments. NPCI launched the NIPL in August 2020 as the first decisive step to conquer the international market. It also comes at a time when the number of digital payments at the UPI has broken all previous records. According to Dilip Asbe, director of NPCI, ‘several countries’ in Asia, Africa, and the Middle East have expressed interest in repeating NPCI payment models in their own jurisdictions.

 NPCI entered the digital payments market in Singapore last year when the Federation of Indian Chambers of Commerce and Industry (FICCI) signed an agreement with the Singapore Fintech Association to bring UPI to foreign markets. In Singapore, the implementation of the UPI is expected to address the lack of payment options for foreign Indian travelers experiencing currency conversion problems or the unavailability of credit or debit cards.

 NPCI has partnered with the Electronic Transmission Network (NETS) in Singapore to deploy UPI-based QR code payment terminals at various points of interest, including airport terminals.

 The success of UPI in India has also prompted Google LLC to recommend a real-time payment platform similar to the US Federal Reserve. In August 2020, the Federal Reserve released a document proposing the development of a new 24/7 real-time interbank service that would support faster payments in the United States. The Central Bank has asked interested parties for suggestions on the design and features of the FedNow service, which could be launched in 2023 or 2024.

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