US Private Banks Could Embrace UPI for Faster Digital Payments, Says Fed Reserve Governor
As the Unified Payments Interface (UPI) continues its global expansion, the possibility of US private banks integrating with India’s unique digital payments platform is gaining traction. Federal Reserve Governor Christopher Waller, speaking at the 'Global Fintech Fest' in Mumbai, highlighted that cross-border payment interlinking is a key focus within the G20 roadmap, and connecting with UPI could be a strategic move for US banks.
Waller acknowledged that while the US currently lacks the necessary banking connections to offer a comprehensive cross-border payments product, there are private banks in the country that could explore linking with UPI. However, he emphasized that a compelling value proposition needs to be established before such integration can take place.
Praising India’s digital payments infrastructure, Waller noted that the public-private partnership model has been instrumental in broadening financial inclusion across the country. “India’s technology-driven payments revolution, enabled by a collaborative ‘technology stack’ of digital platforms, has brought financial inclusion to millions at remarkably low costs”, Waller remarked.
Addressing the broader implications of public and private sector collaboration, Waller stressed that this partnership could be key to advancing cross-border payments. He pointed out that the G20 roadmap addresses the longstanding challenge of creating more cost-effective and timely cross-border payments for both consumers and businesses.
Waller also highlighted the potential of interlinking domestic fast payment systems across countries. “Interlinking arrangements would allow banks in different countries, who are users of domestic fast payment systems, to send payments to each other through technical connections between their respective systems”, he explained.
The Federal Reserve, according to Waller, is committed to working with international bodies to enhance the speed and efficiency of cross-border payments. He expressed optimism about the future, stating, “I expect the technical capabilities, legal infrastructure, and use cases for faster cross-border payments will evolve, and I look forward to seeing the private-sector innovations that will emerge”.
This development follows an earlier statement by Reserve Bank of India (RBI) Governor Shaktikanta Das, who offered India’s UPI system as a plug-and-play solution for other countries. Das highlighted UPI’s potential to become a quicker and more cost-effective alternative for cross-border remittances, adding that the system is now adding up to 6 million new users every month.
With global collaborations on the rise, the National Payments Corporation of India (NPCI) has set an ambitious target of reaching 1 billion UPI transactions per day in the coming years, underscoring UPI’s growing significance on the international stage.
