UPI Expansion: Peru to Implement Real-Time Payment System in South American First
As a significant milestone for global financial technology, NPCI International Payments Ltd. (NIPL) and the Reserve Bank of Peru (BCRP) have announced a collaboration to implement a Unified Payment Interface (UPI)-like real-time payments system in Peru. Peru stands out as the first South American country to adopt the UPI technology, which is likely to have revolutionized digital payments in India and beyond.
NIPL, a subsidiary of the National Payments Corporation of India (NPCI), has been aggressively expanding its footprint internationally. This venture in Peru follows complete UPI implementations in other different countries, which include France, Sri Lanka, Singapore, and Mauritius. This association with Peru sets a landmark move in NPCI’s strategy in order to promote real-time payments globally and demonstrates the manageability and adaptability of UPI technology in diverse markets.
It is anticipated that Peru’s financial ecosystem will become much more efficient with the adoption of a system like UPI. Economic growth and improved financial inclusion are the goals of this newly launched financial ecosystem, which will enable prompt transactions between consumers and institutions. Through the partnership with NIPL, BCRP will have access to the technical know-how required to set up a reliable and efficient real-time payment system.
As part of their collaboration, NIPL and BCRP will use UPI’s cutting-edge technology to develop a real-time payment system that is customized to Peru’s unique needs. Peer-to-peer transfers, merchant payments, bill payments, and other financial transactions will all be supported by the system, which will promote a more diverse and dynamic economy.
Before venturing into Peru, NPCI had already made significant strides in introducing UPI technology across various international markets. In January 2024, NPCI launched the UPI-PayNow linkage, enabling direct remittances between India and Singapore. This was followed by a partnership with Lyra in February to facilitate UPI acceptance in France. Besides, UPI services were extended to Sri Lanka and Mauritius in the same month, further showcasing the versatility and global appeal of the UPI platform.
In addition to the Peru project, NPCI is also set to introduce India’s RuPay service in the Maldives. This move, as highlighted by a senior Maldivian minister, is anticipated to strengthen the Maldivian rufiyaa (MVR) and enhance the country’s payment infrastructure. RuPay, developed by NPCI, is India’s leading global card payment network, widely accepted across ATMs, POS devices, and e-commerce platforms in India.
The implementation of UPI technology in Peru is expected to bring several technological advancements. The system will have the cutting-edge features such as QR code payments, biometric authentication, and AI-driven fraud detection to makesure secure and efficient transactions. Furthermore, the collaboration will focus on promoting sustainable financial practices by reducing reliance on cash and enhancing digital financial literacy among the Peruvian population.
Despite the promising outlook, the implementation of a UPI-like system in Peru is not without challenges. Key considerations include:
- Ensuring interoperability with existing financial systems.
- Addressing cybersecurity concerns.
- Achieving widespread adoption among users.
NPCI and BCRP will need to work closely to overcome these challenges and ensure the successful deployment of the new payment system.
The collaboration between NPCI International Payments Ltd and the Reserve Bank of Peru to implement a UPI-like real-time payments system marks a historic development in the global financial landscape. By adopting this innovative technology, Peru is poised to enhance its financial infrastructure, drive economic growth, and set a precedent for other South American countries. As NPCI continues to expand its global presence, the success of this partnership will serve as a testament to the transformative potential of UPI technology in fostering financial inclusion and economic resilience worldwide.
