Other nations interested in Indian payment systems, says finance minister

Union finance minister Nirmala Sitharaman lauded India’s strides in the payments space, stating it has generated interest from Singapore, Bhutan and France.

“Countries such as Singapore, Bhutan, France’s Lyra, and also many others are seeing the use for RuPay cards and the unified payments interface (UPI),” Sitharaman said at the Global Fintech Fest.

India Stack, particularly the payments stack, has been very well recognized, and people are looking to share their thoughts with India, she said, adding that many of India’s bilateral engagements with counterparts today focus on this subject. India Stack refers to a set of open application programming interfaces (APIs) and digital public goods.

The digitalization of financial services in India, she said, has allowed many unbanked citizens, who were previously part of the informal economy, to access financial services from formal channels. This is the reason why there is an increase in usage of UPI, not just in the urban metropolitan areas but also in tier II and III cities.

“We have led the way in bringing an inclusive financial world by making sure financial services will be accessed through the India Stack, and that itself has four different layers,” she said.

Establishing the scale of some of the digital services, Sitharaman said that so far, India has issued 1.32 billion Aadhaar numbers.

UPI, the homegrown payments system, has been instrumental in promoting digital payments in India and achieved a transaction value of $940 billion in 2021, equivalent to 30% of India’s gross domestic product, she said.

“In five years since its launch, the compound annual growth rate (CAGR) growth is 160% in value and has eclipsed all other payment forms. As of July, there are 338 banks live on the UPI platform. In the same month, UPI registered 6.28 billion transactions valuing ₹10.62 trillion,” said Sitharaman.

She said at a separate event in Delhi on Tuesday that UPI would target a billion transactions daily in the next five years.

The National Payments Corp. of India (NPCI), the minister said, is taking UPI international by helping other countries to create their own payment systems.

The retail payments umbrella entity is also making cross-border payments easier by means of UPI or RuPay card acceptance for remittance.

Meanwhile, the account aggregator framework, she said, will revolutionize the credit flow towards medium and small industries.

After going live in September last year, 52 RBI-regulated entities, including banks and non-banking financial companies , are on the account aggregator network as of September this year.

“Apart from the banking sector, the insurance sector and the pension sector, other players are also joining the platform. The number of accounts enabled on the account aggregator network stands at 1.1 billion. A wealth of opportunities lies there for the global fintech people to see what more can be done creatively if people are coming on board,” she said.