Prime Minister Narendra Modi launched the Belt and Road initiative that became his answer to China’s multi-trillion dollar ports and pipelines.
As India stacks upon its digital goods, the Prime Minister is eager to export these products. Plans were announced last week regarding Nepal’s central bank backing up the release of India’s payment models in their country. National Payments Corporation of India has partnered with the Reserve Bank of India to support this project.
This would allow Nepal to duplicate India’s successful model and hopefully pave its way into digitalization. India’s payment methods have been hailed by venture capitalists as “world’s most sophisticated markets for financial technology”. India’s “Unified Payments Interface”, is an open set of specifications that makes it simpler for startups to survive by speeding up the transfer of money, reducing the opportunity for tax evasion, and making it easier to avoid the taxman.
The technology democratizes payments by allowing laborers, young professionals, small retailers, and huge merchants to send money to each other’s bank accounts in real-time using their cellphones at no cost. A QR code, an email-styled address, or a phone number are all used. In 2021, UPI processed 39 billion transactions worth $940 billion, accounting for roughly a third of India’s GDP. Credit card firms’ attraction is diminished by the deceptively simple design.
The UPI-based payment system is highly recommended. Google has suggested the use of a similar system to the U.S. Federal Reserve in 2019. Bhutan has also begun to set up QR code payments. Singapore and India have also partnered to accept UPI payments.
India and others who follow its technological example may benefit from each other’s efforts. The adoption of a UPI QR standard throughout the world would help kickstart a long-overdue revolution in lowering cross-border transfer rates.