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US Treasury official commends India's UPI system for cross-border payment leadership

Highlighting India's distinct progress, Shambaugh mentioned that India has effectively advanced bilateral links between its Unified Payments Interface system and those of other nations, such as Singapore and the United Arab Emirates.

Edited By: Nitin Kumar @Niitz1 New Delhi Published on: October 19, 2023 8:14 IST
UPI system
Image Source : PEXELS Making a payment with a smartphone.

In a speech at Harvard Law School, Jay Shambaugh, Under Secretary of the US Treasury for International Affairs, highlighted the role of India's Unified Payments Interface (UPI) in advancing bilateral ties with nations like Singapore and the United Arab Emirates. He stated that India's efforts in this area were commendable, showcasing UPI's global influence.

Cross-border payment innovations gaining traction

Shambaugh also noted that several ASEAN countries aspire to interlink their fast payment systems on a multilateral scale, signifying a growing interest in cross-border payment innovations.

Modernizing legacy payment systems

Numerous initiatives are already underway to modernize legacy payment systems. Banks, payment service providers, system operators, and financial market infrastructures are investing in improving the speed, cost-effectiveness, transparency, accessibility, and efficiency of their payment systems. For example, the adoption of the ISO 20022 messaging standard is enhancing data richness and promoting faster, more reliable payment processing.

G20 payments roadmap fuels near-term progress

Shambaugh emphasized that the G20 Payments Roadmap is steering efforts toward opportunities for tangible near-term advancements. Notably, one of the three primary action areas of the G20 roadmap is "payment system interoperability and extension." This facilitates improved payment system connectivity and operational alignment along key corridors, ultimately enabling instant transfers and settlements across systems.

Exploring the future of payments

Shambaugh also highlighted that jurisdictions are simultaneously exploring the future landscape of money and payments, including experiments with cross-border Central Bank Digital Currencies (CBDCs) and Distributed Ledger Technology (DLT)-based payments. These innovations offer the potential to create more efficient and transparent cross-border payment systems while reducing associated risks.

Jay Shambaugh praised India's UPI system for its role in enhancing bilateral connections and expressed optimism about the future of cross-border payments powered by new technologies.

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