NPCI Partners With Peru To Build UPI-Like Payments System

SUMMARY

With this, Peru becomes the first country in South America to adopt UPI

Ritesh Shukla, chief executive of NPCI International, said that the partnership with the BCRP aims to strengthen Peru’s financial infrastructure

This comes days after the NPCI’s international arm, NIPL, signed an agreement with the Bank of Namibia to develop a UPI-like system for the African nation last month

The National Payments Corporation of India’s (NPCI) international arm, NPCI International Payments Limited (NIPL), has signed an agreement with the Central Reserve Bank of Peru (BCRP) to develop a digital payments system for the South American nation akin to the homegrown Unified Payments Interface (UPI).

With this, Peru becomes the first country in South America to adopt UPI.

This also marks NPCI’s second collaboration with a central bank to deploy UPI stack in the international market.

Ritesh Shukla, chief executive of NPCI International, said that the partnership with the BCRP aims to strengthen Peru’s financial infrastructure to foster economic growth. 

“We will be working together to address our common objective of promoting digital payments, financial inclusion, cost optimisation, and transparency in the payment landscape, with scope for further scalability and adaptability, to embrace future technological advancements and market demands. It also reflects on our commitment towards advancing digital public goods across the globe,” Shukla said. 

As part of this partnership, BCRP can leverage UPI to make instant payments between individuals and businesses.

“It will reduce reliance on cash-based transactions and will expand the use of digital payments to Peru’s large unbanked population. It will foster innovation and resilience in the Peruvian payment ecosystem,” NPCI said in a statement.

BCRP’s governor Julio Velarde said, “The support of the Reserve Bank of India has been a cornerstone of this agreement. We consider that this new infrastructure will play a fundamental role in fostering innovation and in allowing new participants to enter the Peruvian ecosystem. This will undoubtedly offer new and accessible payment services to everyone, especially the unbanked population in Peru, complementing the existing payments industry.”

BCRP is the Central Reserve Bank of Peru that is responsible for maintaining price stability, achieved through an inflation-targeting regime and a flexible exchange rate system. It also regulates Payment Systems in Peru and manages the Real-Time Gross Settlement (RTGS) system which is its nationwide digital payment infrastructure.

This comes days after the NPCI’s international arm, NIPL, signed an agreement with the Bank of Namibia to develop a UPI-like system for the African nation last month.

Under the partnership, the NPCI will offer technology and other insights to the Bank of Namibia to help develop a digital payments system that will look to boost real-time person-to-person (P2P) and merchant payment transactions (P2M) in the country.

In September last year, it was reported that the Indian government was in discussions with multiple South American and African countries to introduce the UPI and RuPay cards in these countries. 

Peru has become the latest country to contribute to UPI’s bid to expand its offerings globally. Before this, Sri Lanka, Mauritius, Bhutan, Nepal, the UAE and Canada accepted the infrastructure in some form or another. 

Additionally, NIPL was also reportedly discussing with banks and authorities in countries such as New Zealand and the US to deploy the payment system. 

This comes at the heart of UPI registering a 5% surge in its transactions for May to 14.04 Bn in May from 13.30 Bn in the previous month. The transaction volume in May stood at INR 20.45 Lakh Cr, up 4.1% from April’s 19.64 Lakh Cr.

Alongside this, there have been several new feature launches from NPCI in recent times. This includes UPI Lite for supporting low-value transactions, UPI Lite X for offline transactions and Hello! UPI for making payments through voice.

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