Peru Partners with India to Develop UPI-Inspired National Payment System

The Central Bank of the Republic of Peru (BCRP) is set to develop a payment system modeled after India’s Unified Payments Interface (UPI) through an collaboration agreement with National Payments Corporation of India International Payments (NIPL) dated 07th June, 2024. The collaboration, supported by the Reserve Bank of India (RBI), aims to promote financial inclusion in Peru by enabling offline transactions and enhancing interoperability among domestic and international payment systems.

BCRP Governor Julio Velarde emphasized that the new system will foster more payment options for Peruvians and allow new participants to enter the Peruvian financial ecosystem, complementing the existing payments industry. However, no specific launch date has been announced. An official statement from the BCRP highlighted the objective to promote greater access, security, redundancy, and efficiency in digital payments, along with facilitating the introduction of new use cases.

Established in 2020, NIPL has successfully expanded the UPI system internationally, with official support from countries like Sri Lanka, Mauritius, France, the United Arab Emirates, Singapore, Bhutan, and Nepal. In May, NIPL reached an agreement with the Bank of Namibia to develop a similar payment system. Additionally, Google Pay and financial institutions in the United States, Japan, China, and Singapore have partnerships with NIPL.

In related developments, Yes Bank in India announced on August 30, 2023, the integration of the UPI with the RBI’s digital rupee app, enhancing the usability of the digital rupee. This integration allows Yes Bank account holders to make transactions with the digital rupee by scanning UPI QR codes. The UPI, operated by the National Payments Corporation of India (NPCI), is widely used by 150 million merchants in India.

Ajay Rajan, a Yes Bank executive, stated that the transition to an interoperable CBDC platform promises seamless, efficient, and broader transactional capabilities for customers. Yes Bank was one of the original participating banks in the retail digital rupee pilot project launched in December 2022. By February 2023, the project had 5,000 participating merchants, 50,000 CBDC users, and had carried out 800,000 transactions worth $134 million.

The digital rupee has been accepted at some stores in the large Reliance Retail chain since February 2023, using QR codes in collaboration with ICICI Bank, Kotak Mahindra Bank, and Innoviti Technologies. This initiative reflects the growing integration and adoption of digital currencies and advanced payment systems in India and beyond.