Cross-Border Payments between India and Europe

Context:

Recently, the Reserve Bank of India (RBI) and the European Central Bank (ECB) announced the launch of the initial phase of linking India’s Unified Payments Interface (UPI) with the Eurosystem’s TARGET Instant Payment Settlement (TIPS) platform.

Key Features of UPI–TIPS Linkage:

Section	Details
1. What Is Being Linked?	• The initiative aims to interlink UPI and TIPS to enable seamless payments across the India–Eurozone corridor.

2. Strategic Rationale	• Aligns with the G20 Roadmap for Enhancing Cross-Border Payments—faster, cheaper, more transparent, inclusive payments. • Supports the ECB’s retail payments strategy and strengthens the international role of the euro. • Enhances India’s global presence by expanding UPI’s international footprint.
4. Benefits	• Reduced Remittance Costs through interoperability and streamlined payment flows. • Faster Settlement—near real-time payments across borders. • Enhances financial inclusion & efficiency, benefiting migrant workers, expatriates, SMEs, and cross-border users. • Boosts India’s global digital payments leadership, strengthening UPI’s position globally.
5. Challenges / Risks	• Regulatory & legal hurdles relating to cross-jurisdiction rules, data norms, compliance. • Risk management challenges—credit, operational, settlement risks. • Technical integration issues: interoperability, 24×7 reliability, fraud prevention. • Currency risk due to INR–Euro conversion and liquidity management. • Adoption barriers—participation from banks, PSPs, end-users, and need for awareness & infrastructure.

About UPI International Expansion:


About UPI	What it is: Real-time payment system developed by NPCI enabling instant bank-to-bank transfers. How it works: Uses a single mobile app linked to multiple bank accounts; payments can be made using QR codes, UPI IDs, or mobile numbers. National impact: Major driver of India’s digital payments ecosystem; promotes financial inclusion, reduces cash dependency, and forms a core part of India’s Digital Public Infrastructure (DPI).
Countries Where UPI Is Accepted	• Bhutan • France • Mauritius • Nepal • Qatar • Singapore • Sri Lanka • United Arab Emirates (UAE)
International Expansion	• Expansion led by NPCI International Payments Limited (NIPL). • Focus on creating direct payment linkages or supporting countries in developing their own real-time payment platforms. • Existing success stories: UPI–PayNow (Singapore) link, acceptance via global partners like Lyra, Liquid Group, etc.

Conclusion:

The realisation phase of the UPI–TIPS linkage between RBI and ECB is a landmark step in global payments architecture. It represents not just a technical integration, but a strategic leap in cross-border financial connectivity. Once operational, it could significantly lower the friction and cost of remittances between India and Europe — benefiting millions of users, especially in the diaspora and SMEs.