The Reserve Bank of India (RBI) has announced a new initiative to link India’s domestic payment platform, the Unified Payments Interface (UPI), with the TARGET Instant Payment Settlement (TIPS) system operated by the European Central Bank’s Eurosystem. This interlinking marks the start of the realisation phase of the collaboration, following earlier exploratory work between the two central banks.

Key Highlights

• Reserve Bank of India begins linking Unified Payments Interface with Europe’s TARGET Instant Payment Settlement for instant cross-border remittances.
• The interlinkage aligns with the European Central Bank and India’s technical integration plan, focusing on risk-management, settlement and transparency.

The goal of the UPI-TIPS linkage is to enable faster, more cost-effective and transparent cross-border remittances between India and the Euro area. It aligns with global efforts, such as the G20 roadmap, to enhance the efficiency and accessibility of international payments.

According to the RBI, the collaboration will involve the Indian payments authority NPCI International Payments Limited (NIPL) and the European Central Bank working together on the technical integration, risk management, and settlement arrangements needed for the link-up.

This move is seen as a significant leap in broadening the digital payments ecosystem across borders. Previously, UPI had already seen acceptance in several international markets, and this step now paves the way for India-Europe payment interoperability.

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For businesses and individuals who send or receive remittances between India and Europe, this development promises smoother transactions with potentially lower costs and faster settlement. Both jurisdictions stand to benefit from the improved infrastructure.

In summary, the RBI’s announcement of the UPI-TIPS linkage initiates a structural change in cross-border payments, reflecting India’s ambition to integrate its payments architecture with global systems and enhance financial connectivity with Europe.