Indians living abroad sent back $87 billion last year, the most amount of any country the World Bank has been keeping track of. With such a huge sum on the line, India is planning an alternative to SWIFT banking system whichis prone to US sanctions.
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The business that created the foundation for India’s digital payments intends to make it less expensive and simpler for the 32 million Indians who live abroad to send money back home, reports Business Standard.
Indians living abroad sent back $87 billion last year, the most amount of any country the World Bank has been keeping track of. According to Ritesh Shukla, CEO of NPCI International Payments Ltd., the remittances industry is ripe for disruption because it costs $13 on average to move $200 across borders.
“We have displaced cash in India to a large extent and are now looking to repeat the success in cross-border corridors,” said Shukla. “Overseas Indians can use our rails to remit money inwards straightway into their bank accounts, and for the markets where Indians travel frequently, we will build acceptance for our instruments.”
Shukla emphasised that the goal was not to replace existing platforms, but rather to provide India with a homegrown alternative to SWIFT, the Belgian company that operates the cross-border payment system. A $3 trillion market for rapid digital transactions has been created in India thanks to the NPCI’s universal payment interface, which is shared by about 330 institutions and 25 applications, including WhatsApp and Google Pay from Alphabet Inc. and Meta Platform Inc.
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In order to duplicate its domestic success, NPCI is currently linking the UPI platform to systems in other nations. According to Shukla, it is discussing partnerships with governments, fintech firms, and service providers all across the world in an effort to lower transaction costs and facilitate more small-ticket transactions.
According to Mayank Goyal, CEO of moneyHop, a cross-border banking software that enables users to send money abroad over the SWIFT network, “this is going to take the payments world by storm.” Goyal stated that because UPI rails facilitate cross-border payments, the business will work to incorporate them into the app.
The Reserve Bank of India stated in a report that UPI’s connections with foreign countries will further anchor commerce, travel, and remittance movements between the countries and reduce the cost of cross-border remittances.
Together with the nation’s lenders, the Reserve Bank of India established NPCI in order to facilitate quicker, easier, and more affordable retail payments. To rapidly transact with vendors and send money between friends or family, a user only requires a virtual payment address.