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June 5, 2024

Peru to Adopt UPI Technology: A Milestone in South American Financial Innovation

Peru is set to become the first South American country to embrace a Unified Payments Interface (UPI)-like instant payments system. NPCI International Payments Limited (NIPL), the international arm of the National Payments Corporation of India (NPCI), has signed an agreement with the Central Reserve Bank of Peru (BCRP) to implement this advanced financial technology.

This marks NIPL’s second collaboration with a central bank to bring the UPI stack to the global stage. Earlier this year, the payments organization partnered with the Bank of Namibia (BoN) to introduce a similar system in the African nation.

Ritesh Shukla, CEO of NIPL, commented on the partnership, saying, “Our collaboration with the BCRP is aimed at strengthening Peru’s financial infrastructure and fostering economic growth. Once operational, Peruvian citizens will benefit from unmatched convenience, security, and efficiency in their financial transactions.”

The introduction of the UPI-like system in Peru will enable instant payments between individuals and businesses, significantly enhancing the scope and ease of digital payments. It is also expected to extend financial services to Peru’s unbanked population, thereby promoting greater financial inclusion.

Support from the Reserve Bank of India

The success of this agreement is attributed to the support from the Reserve Bank of India (RBI). Julio Velarde, Governor of the BCRP, emphasized the central bank’s objectives, stating, “The BCRP aims to promote financial inclusion, security, and efficiency, and to introduce new use cases in digital payments. This new infrastructure will be fundamental in fostering innovation and allowing new participants to enter the Peruvian financial ecosystem.”

NPCI’s Global Expansion

This development is part of NPCI’s broader strategy to globalize the UPI framework. NPCI has already made significant inroads into markets such as France, Sri Lanka, Singapore, and Mauritius. In January 2024, NPCI launched the UPI-PayNow linkage, facilitating direct remittances between bank accounts in India and Singapore. The initiative has enhanced cross-border financial transactions, making it easier for individuals to send and receive money internationally.

Following this, in February 2024, NPCI partnered with Lyra, a French e-commerce and proximity payments company, to enable UPI acceptance in France. Additionally, UPI services were rolled out in Sri Lanka and Mauritius, further expanding the technology’s global footprint.

Future Prospects for Peru

The implementation of the UPI-like system in Peru is expected to revolutionize the country’s payment landscape. By providing a seamless and secure payment method, it will likely drive economic growth and innovation. The increased accessibility of financial services will empower more people to participate in the formal economy, thus enhancing overall economic stability and growth.

In summary, Peru’s adoption of UPI technology represents a significant step towards modernizing its financial infrastructure. The collaboration between NIPL and BCRP promises to deliver a more inclusive, secure, and efficient payment system, setting a precedent for other countries in the region to follow. As UPI continues to expand internationally, it holds the potential to transform financial ecosystems worldwide, fostering greater financial inclusion and economic development.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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