NPCI aims for real-time payment linkage between banks in India and the US
- ByStartupStory | February 13, 2024
The National Payments Corporation of India (NPCI) is in ‘advanced’ talks with Indian and US banks to establish a real-time payment link between the two countries.
NPCI is collaborating with Indian banks experienced in Unified Payments Interface (UPI), and foreign banks to develop models and conduct pilot tests.
Established in 2008, NPCI serves as an umbrella organization for retail payments and settlement systems in India, boasting a robust infrastructure.
The initiative seeks to capitalize on NPCI’s expertise in cross-border payments, the report notes.
NPCI, backed by the Reserve Bank of India (RBI), is engaging with FedNow or its UPI equivalent, the report reveals.
FedNow, launched by the US Federal Reserve, offers real-time payment services, aligning with NPCI’s objectives.
The proposed payment model between India and the US will initially prioritize small consumer transactions due to the absence of a nationwide system akin to UPI in the US.
“As the model is real-time, transactions will be limited in scale and value, allowing only ‘modest’ payments initially,” the report explains.
“If you want to send money or receive payment from a relative under the model, you cannot do it through a foreign bank that is not a consumer bank in India,” another source highlighted.
“In the United States, a person can use an American bank to send or receive money from there,” they further added.
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