India and Europe Forge New Digital Payment Corridor
The Reserve Bank of India has officially moved into the implementation stage for a landmark project that will connect India's Unified Payments Interface with Europe's instant payment system, TARGET Instant Payment Settlement. This development follows successful high-level discussions between the RBI and the European Central Bank, marking a significant leap in international financial cooperation.
What is the UPI-TIPS Integration?
TIPS, or TARGET Instant Payment Settlement, serves as the Eurosystem's instant payment infrastructure, managed collectively by the European Central Bank and the central banks of eurozone nations. The RBI is executing this ambitious cross-border linkage in partnership with NPCI International Payments Ltd, the global arm of the National Payments Corporation of India.
In an official statement released on Friday, the central bank confirmed that Reserve Bank of India and NIPL will continue to collaborate closely with European Central Bank to make the UPI-TIPS connection operational. This collaboration will encompass critical areas including technical integration, comprehensive risk management frameworks, and establishing robust settlement arrangements.
Transformative Benefits for Millions of Users
Once fully operational, this financial bridge is poised to deliver substantial advantages. The primary benefit will be sharply reduced transfer costs and settlement friction for the millions of individuals and businesses that regularly send or receive money between India and the eurozone. This aligns perfectly with global efforts to make cross-border remittances more affordable and efficient.
Beyond personal remittances, the integration promises to significantly boost merchant acceptance for Indian travellers visiting Europe. Similar to the QR-based UPI deployments already active in markets like Singapore, Indian tourists and business travelers could soon use their familiar UPI apps for seamless payments at retail stores, restaurants, and tourist attractions across the continent.
Part of a Broader Global Strategy for UPI
This initiative is not an isolated effort but part of a concerted strategy by the RBI to actively pursue interlinking of UPI with fast payment systems in other regions. UPI, India's homegrown digital payment system that enables instant, 24/7 money transfers between bank accounts via mobile apps, is rapidly expanding its international footprint.
The central bank emphasized that these cross-border payment initiatives are fully aligned with the G20 Roadmap for enhancing cross-border payments, which focuses on making international remittances cheaper, more efficient, transparent, and accessible to all.
This European partnership follows other international expansions, including the March 2025 partnership between NIPL and Singapore-based payments infrastructure provider HitPay to expand QR code-based UPI transactions across the island nation. The RBI has been actively developing multiple payment corridors, with recent focus on countries in Asia and the Middle East, aiming to replicate UPI's phenomenal domestic success on the global stage.
