Google wants US Fed to emulate India’s UPI for its RTGS system

16 Dec 2019


In signs that India’s Unified Payments Interface (UPI) is getting global recognition, Google LLC has recommended it to the United States Federal Reserve for its proposed `FedNow’ - a new interbank gross settlement service.

Google has written to the US Federal Reserve Board detailing the successful example of UPI-based digital payment in India in order to build `FedNow’ - a new interbank real-time gross settlement service (RTGS) for faster digital payments in the US.
“Google's integration of Google Pay with UPI, in collaboration with four of India's largest banks, demonstrates Google's commitment to innovation through collaboration with government and financial services partners,” Google LLC stated in a letter to the Fed’s Board of Governors on 7 November.
In the letter to Fed, Mark Isakowitz, vice president for government affairs and public policy, US and Canada of Google, said the UPI was thoughtfully planned and critical aspects of its designs led to its success.
The company said it worked closely with the National Payments Corporation of India (NPCI), the payment regulator governed by the Reserve Bank of India (RBI), to build ‘Google Pay’ for the Indian market./
Detailing the successful example of UPI-based digital payments in India, Isakowitz said planning and design were key and that the system is "open" - meaning technology companies can build applications that help users directly manage transfers into and out of their accounts held at banks.
“The approach in India attained amazing results for banks, consumers, other players within the payments ecosystem and India's central bank,” the letter said, adding that the approach in India attained amazing results for banks, consumers, other players within the payments ecosystem and India's central bank.
“This system successfully encouraged close collaboration between technology and financial services providers, and created winning opportunities across the ecosystem,” Google in the letter further said.
The US Federal Reserve had in August this year announced that it is working on FedNow RTGS, which would offer round the clock real time payment services 365 days a year. It is expected to be operational by 2023 or 2024 and would allow transactions up to $25,000.
“Google views digital commerce, and the emergence of new forms of payment systems, as essential to promoting an inclusive and more helpful payment system,” the letter from Google said, adding that the company fully supports the Federal Reserve's decision to deploy the FedNow RTGS, which can improve the accessibility and usefulness of payment systems for all Americans.
Based on its learnings from UPI, Google has suggested that industry and government should work together to grow ecosystems where payments are inclusive. It has also said it sees the future of online payments as mobile first, and also make digital payments simple and helpful.
It has also recommended other measures to the US Fed including supporting real-time low-value and high-value payments, using standardised messaging protocols, low fees and open systems.
UPI, which was launched in April 2014, allows immediate money transfer through mobile device round the clock 24x7 and 365 days. By November this year, 143 banks were live on the UPI platform and the number of transactions had surged to Rs121.87 crore.
NPCI deployed a real-time payment system UPI in 2016. 
According to a recent Assocham-PWC study, digital payments in India will more than double to $135.2 billion in 2023 from $64.8 billion this year, with a compounded annual growth of 20.2 per cent.

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