NEW DELHI: After India pioneered the revolutionary real payment system UPI, several other countries have followed suit and set up their own payment systems. In a swiftly evolving digital landscape, fast payment systems have emerged as game-changers in the realm of financial transactions.
France and Singapore have chosen to adopt the Indian model, while others are in the process of developing their own real money transfer payment systems. In this article, we delve into the countries that are actively working on creating their real money transfer systems.
India
India’s Unified Payments Interface (UPI) has become a beacon of innovation in the world of digital finance. Launched as an instant, real-time fast payment network in India, UPI has revolutionised the way payments are made.
Originally limited to bank accounts, UPI has expanded its scope to include payments from wallets and credit cards. The UPI payment system is built as an interoperable protocol, allowing developers to create apps that offer payment services to all customers of participating banks. It supports a variety of payment methods, including QR code-based payments, UPI Lite, UPI123Pay, UPI credit, and more.
This versatility facilitates seamless real-time fund routing, simplifies merchant payments, and provides a convenient way to schedule and fulfil peer-to-peer collect payment requests.
One of UPI’s greatest strengths is its widespread adoption, which has been driven by its user-friendly interface, open banking features, and active participation from the private sector. The UPI platform has gained significant popularity in India, with more than 9.41 billion transactions valued at about Rs 14.89 trillion taking place in May 2023 alone. For 2022–23, the total value of UPI transactions accounted for nearly 50% of the entire Indian payment ecosystem.
Brazil
In November 2020, the Central Bank of Brazil launched Pix, a revolutionary fast payment system that has since transformed the country’s financial landscape. Pix enables seamless fund transfers between all types of transaction accounts in the Brazilian market, creating a payment service ecosystem with low acceptance costs and high usability. Pix aliases, which provide account data to initiate transactions, are as simple as an email address or a mobile phone number.
The platform also actively employs QR codes as the access channel. Since its launch, Pix has experienced rapid growth: by December 2021, approximately 109 million consumers and 7.6 million businesses, primarily MSMEs, were active users of the platform. This includes about 45 million citizens who previously lacked access to DFS.
European Union
The TARGET Instant Payment Settlement (TIPS) is a fast payment system introduced by the Eurosystem in November 2018. It enables customers of financial institutions to carry out instant credit transfers (SCT Inst) at any time and at a low cost—TIPS operates on a full cost-recovery and not-for-profit basis. TIPS was developed as an extension of TARGET2, the real-time gross settlement (RTGS) system, and ensures the settlement of transactions in euros in less than 10 seconds, using central bank money.
Other non-euro jurisdictions in the region also expressed interest in participating in the TIPS framework, such as Sweden, Denmark, and Norway, and discussions are on to allow TIPS to settle fast payments in other currencies, such as the Swedish krona. Depending on the solutions they use, European citizens can make and receive instant credit transfers via the Internet, mobile banking, or other initiation methods such as QR codes.