Google writes to US Fed citing successful example of India's UPI
Google has written to the United States Federal Reserve Board citing the successful example of digital payment in India in order to build 'FedNow' in US market.
- Republic Business
- 2 min read
Google has written to the United States Federal Reserve Board citing the successful example of digital payment in India in order to build 'FedNow'. For a new interbank real-time gross settlement service (RTGS) designed to make digital payments fast in US, Google quoted government's Unified Payments Interface (UPI) scheme and how the company works closely with the National Payments Corporation of India (NPCI), which is the payment regulator government by the Reserve Bank of India (RBI) in order to build 'Google Pay' for the market in India.
According to Google, the NPCI deployed UP system of 2016 was thoughtfully planned and the critical aspects of the scheme paved the way for its success. In the letter written by the Vice President of Government Affairs and Public Policy, US and Canada, Mark Isakowitz, said that UPI is an interbank transfer system and is real-time. Along with that, UPI is 'open' which means that technology companies can build applications that help users to directly manage their transfers into and out of the accounts held at various banks. Currently, there are more than 140 member banks in the scheme as opposed to its launch when only nine banks chose to participate.
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Digital payment in India
The adoption of the digital payment system in India has been drastic. It reportedly grew from 1,00,000 monthly transactions to 77 million, to 480 million, to 1.15 billion monthly transactions in the first four years. The company letter also said that in a matter of 'just three years' the annual run rate of transactions through the UPI is nearly 10 per cent of India's GDP, including 800 million monthly transactions valued at $19 billion. The letter which surfaced on December 14, and was dated of November 7 also said that 'Google has been a successful market participant in India's use of UPI'. Goole Pay even provides one of the three leading mobile applications that use UPI when measured by transaction volume. In the same period, according to Google, the usage of credit, as well as debit cards, have doubled.