India’s praiseworthy UPI (Unified Payments Interface) system has made life easier for people all across the country. The effectiveness of this payment system has reached the Land of the Rising Sun, Japan. In recent reports, it has been said that the country is looking to adapt India’s UPI payment system soon to ensure digital cooperation between both governments. This consideration aims to ease cross-border transactions between Japan and India.
If this works out, then India and Japan will soon share a cooperative digital relationship benefitting the customers from both countries. As of now, Bhutan, Singapore, Nepal, and UAE (United Arab Emirates) have also accepted the UPI system of India. In this blog, we will uncover more details on this recent announcement, but before that, let us first take a look at the UPI payment system of India.
India’s UPI Payment System: Overview
UPI is the fastest-growing payment network in India that has revolutionised the digital payment system of the country. The system allows customers and merchants to operate multiple bank accounts in one UPI application and rotate funds seamlessly. Every bank in India comes with its unique UPI app for Android, iOS and Windows.
With its secured interface via two-factor authentication and password encryption, the UPI app only takes seconds to make payments across any bank. This payment facility is also offered for free by most banks for general customers but may carry a platform fee for merchants. A UPI app will provide you with every transaction detail, from payment history to bank statements. Every bank has a specific transaction limit in UPI which is set up in the app itself. With time, this seamless payment network is becoming global for its enhanced interoperability.
Global Adoption of India’s UPI Payment System
It is only recently that many countries are adopting India’s UPI payment system. Some of the countries that recently adopted India’s UPI payment system are tabulated below.
|Time of announcement for adoption
|Global entities partnering with UPI network
|Royal Monetary Authority of Bhutan
|Monetary Authority of Singapore, PayNow
|Singapore, Malaysia, Thailand, Philippines, Cambodia, Vietnam, Hong Kong, Taiwan, and South Korea
|Network International (NI)
|Gateway Payment Services, Manam Infotech
|LuLu Financial, NEOPAY (Mashreq Bank)
|June 2022 & July 2023
|August – September 2022
|Netherlands, Belgium, Switzerland, and Luxemburg.
|Central Bank of Oman
|UAE Central Bank’s Instant Payment Platform (IPP)
Details about Japan’s Interest in UPI
As per recent reports, Japan is keenly interested in joining hands with India’s UPI payment system like Singapore and Thailand did. Japanese Digital Minister, Kono Taro earlier announced that the country wishes to increase the interoperability in the payment system of both countries. Other than Bhutan, Singapore, Nepal and UAE, Mauritius, Indonesia and Bahrain have also expressed their interest in joining the UPI payment network of India.
Recently during the meet and greet of Digital and Tech Ministers from G7 countries, India was represented by Mr. Vaishnaw as a guest in Tokyo. This is where the main idea to establish digital cooperation between India and Japan came into the picture. The entire process of creating a secure payment network with Japan will begin soon.
What Can Japan Expect from India’s UPI System?
Japan’s consideration of opting for India’s UPI payment system is driven by their belief in the benefits of it. Japan can expect the following advantages from India’s UPI payment system:
- Enhanced convenience: UPI system in India is known for its unparalleled user convenience. It eliminates the need to move from one place to another to facilitate payments. One can easily use their mobile phone and transfer money with 100% accuracy and comfort.
- Cost-efficient solution: Indian UPI system stands out as a cost-effective payment system. Its transaction fees are significantly lower than traditional alternatives like credit cards and bank transfers, reducing users’ financial burdens.
- Better security measures: India’s UPI payment system ensures robust security of sensitive and confidential information. It utilises the best practice of two-factor authentication and encryption techniques to secure your data throughout every transaction you make, whether in India or Japan.
- Hassle-free interoperability: The UPI payment system of India serves as an open platform that enhances interoperability between payment systems of different banks and financial institutions. By choosing the UPI network of India, Japan can strengthen collaboration and seamless connectivity with payment systems in other countries as well.
As per reports and the statement by the Digital Minister of Japan, Kono Taro, Japan is considering accepting the huge UPI network of India. The reason for joining hands is to establish digital cooperation between India and Japan. After assessing all the benefits that Japan will get after accepting India’s UPI system, we can vouch that Japan will share a robust payment interface for cross-border transactions soon. With many countries having already adopted this system, Japan seems to become a part of this list.