Editorial Charter

Beyond UPI, India’s Entire Digital Public Infrastructure Is Going Global

There is an opportunity for India to take its digital platforms not only to the developing countries but even to the Western world

Last week the government announced that Sri Lanka and Mauritius were the latest countries to adopt India’s Unified Payment Interface (UPI) after France, UAE, Singapore, Bhutan, and Nepal, taking the tally to seven countries.

The UPI is India's mobile-based fast payment system that allows customers to make instant payments round-the-clock using a Virtual Payment Address (VPA). It was launched by the National Payments Corporation of India (NPCI) in 2016 and since then it has rapidly gained momentum.

In just a few years, UPI has grown from being an ambitious idea to becoming the world’s fifth-largest payment network by volume, behind only Visa, Alipay, WeChat Pay and Mastercard.

But that is not all. In its strides towards taking India’s entire digital public infrastructure (DPI) global, the government and the private sector have been quietly but surely making bold strides. DPI’s global vision today rests on four key pillars: UIDAI and India Stack; MOSIP; Ru-pay; and Diksha.

Four Pillars

For example, ever since the Unique Identification Authority of India (UIDAI) was formed in 2009 and the first Aadhaar card was issued in 2010, India Stack, a group of open Application Programme Interface (APIs) -- mechanisms that enable two software components to communicate with each other – has been adopted not only by more than 1.3 billion people within the country but also many overseas.

It is estimated that at least 40 per cent of the world’s population does not have any digital identities. To bridge the gap, UIDAI developed a Modular Open-Source Identity Platform (MOSIP), which is now rolling out in 10 countries: five countries have already started the national rollout of MOSIP as digital identity, and the next five are doing the pilot implementation. These countries include Morocco, Philippines, Sri Lanka, Guinea, Ethiopia, Togolese Republic, Uganda, Sierra Leone and Burkina Faso.

MOSIP has been developed in alliance with the ID4D initiative of the World Bank and is managed out of IIIT-Bangalore. For these countries, MOSIP is providing a digital identity technology platform as a product, helping them in training and hand-holding them to integrate the open-source systems within their countries free of cost.

The National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA).

One of the important products from NPCI is Ru-pay, a homegrown local payment system. Even though its reach within the country does not in any way match that of VISA and Mastercard despite government push, it is making some progress overseas with international alliances like Discover Financial Services (United States), Japan Credit Bureau and China Union Pay. Conversations with other institutions in developed countries like the United States and Australia are ongoing. The overseas reach is being managed by a subsidiary organisation called NPCI International. Today, Ru-pay is available in over 200 countries worldwide.

Last month, Google India Digital Services (P) Limited and NPCI International Payments Ltd (NIPL), a wholly-owned subsidiary of the National Payments Corporation of India (NPCI) signed a Memorandum of Understanding (MoU) to expand the impact of UPI to countries beyond India.

The MoU has three key objectives. First, it seeks to broaden the use of UPI payments for travellers outside of India, enabling them to conveniently make transactions abroad. Second, the MoU intends to assist in establishing UPI-like digital payment systems in other countries, providing a model for seamless financial transactions. Lastly, it focuses on easing the process of remittances between countries by utilizing the UPI infrastructure, thereby simplifying cross-border financial exchanges.

At the time of the MOU signing, Deeksha Kaushal, Director, Partnerships, Google Pay India said, “UPI has demonstrated to the world the step change that happens in economies with the introduction of interoperable, population scale digital infrastructure and each economy that joins such networks will create impact beyond the sum of parts.”

Added Ritesh Shukla, CEO – NPCI International Payments Limited (NIPL), said, “This strategic partnership will not only simplify foreign transactions for Indian travellers but will also allow us to extend our knowledge and expertise of operating a successful digital payments ecosystem to other countries. The global expansion of UPI represents another step in international commerce, enabling a seamless, secure, and cost-effective payment experience for both merchants and customers worldwide.”

Finally, Diksha, built through a public-private partnership between NCERT under the Ministry of Education, EkStep and the Central Square Foundation has admirers in many African nations. — EkStep is a private initiative for public good co-founded by Nandan Nilekani of Infosys Technologies, his wife Rohini Nilekani and entreprenuer Shankar Maruwada. New Delhi-based Central Square Foundation is an education non-profit promoted by philanthropist and former private equity investor Ashish Dhawan.

Going Forward

Today, India’s DPI is reaching a large number of developing and under-developed nations in Africa and Asia. While adoption and admirers in the developed countries are few, it has a great opportunity to do so in the developed world.

Google has been a great votary of UPI and has been gently nudging the US Federal Reserve for some time to model its FedNow payment along the lines of UPI. Similarly, the island nation of Singapore has been running pilots on the model of UPI and India Stack.

Within the country and outside, different parts of DPI have been unbundled and used. Additionally, going forward, there could be more PPP models and private philanthropic capital like that of Diksha.

A recent RBI Report suggested that, “The time is opportune to leverage these learnings (of DPI) at a global level. Internationalisation of Indian Rupee will facilitate greater degree of integration of the Indian economy with the rest of the world, in terms of foreign trade and international capital flows.”

For India, its DPI provides a great opportunity to be a platform for economic diplomacy. Kenya’s M-Pesa was a global pioneer in digital payments way ahead of the western world. Similarly, India’s Digital Public Infrastructure could be the next global platform for financial inclusion and the global digital economy.

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