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UPI Launch at Eiffel Tower in France

By Amigos IAS

Why is it in the news?

  • NPCI International Payments Limited (NIPL), in collaboration with Lyra, a French leader in securing e-commerce and proximity payments, announced the acceptance of Unified Payments Interface (UPI) payment mechanism in France.
  • France became the first European country to accept UPI payments.

About UPI

  • UPI, launched by the National Payments Corporation of India (NPCI) in 2016, is an instant payment system facilitating inter-bank transfers within India.
  • UPI is an integral component of the Payments layer within India Stack, which is a set of open APIs and digital public goods aimed at unlocking economic primitives of identity, data, and payments at population scale.

 India Stack

About:

  • India Stack is a collection of APIs (Application Programming Interfaces) aimed at enabling presence-less, paperless, and cashless service delivery in India.
APIs, or Application Programming Interfaces, are sets of defined rules that enable different applications to communicate with each other seamlessly.

 

  • It’s a government-led initiative focusing on building a robust digital infrastructure to facilitate various digital services across sectors.
  • Components of India Stack are owned and maintained by different agencies, both governmental and private.

 Components:

Identity Layer (Aadhaar):

  • Aadhaar, issued by UIDAI, serves as the cornerstone of India Stack, providing digital identity products.
  • It’s proof of residence, not citizenship, and supports remote authentication, receiving digitally signed records, and digital signatures.

Payments Layer (UPI):

  • Unified Payments Interface (UPI), managed by NPCI, ensures interoperability among payment systems and applications.
  • Licensed to third-party entities like PhonePe, Google Pay, and Paytm.

Data Governance Layer:

  • Digital Locker, built on Data Empowerment and Protection Architecture (DEPA), includes a consent management system for secure information sharing.
  • Enables better financial, health, and telecom-related products and services.
  • India Stack offers digital resources and tools to support various digital services and initiatives, enhancing accessibility and efficiency for citizens.
  • India Stack components are utilized in various digital solutions rolled out by the Indian government, such as CoWin, DigiLocker, Aarogya Setu, and Government e-Marketplace (GeM). These solutions leverage the fundamental layers of India Stack for streamlined service delivery.
  • The vision of India Stack extends beyond India and can be applied to any nation, whether developed or emerging, to enhance digital infrastructure and service delivery.

 

Significance of Internationalization of India Stack

The internationalization of India Stack holds several significant implications:

  • Global market expansion for Indian startups and tech firms, enabling them to offer their products and services to a wider audience.
  • Interoperability and standardization at a global scale, fostering smoother transactions and operations across borders.
  • Innovation and collaboration leading to the development of new solutions and services that leverage the capabilities of India Stack.
  • Soft power and digital diplomacy, particularly in regions such as the global south, where India can showcase its technological prowess and leadership in digital infrastructure.

 

Efforts at Internationalization of India Stack

  • NPCI International Payments Limited (NIPL), established in 2020 as a wholly-owned subsidiary of NPCI, is spearheading efforts to deploy RuPay and UPI outside of India.
  • NIPL has enabled the acceptance of UPI payments in overseas markets such as Singapore, the UAE, and now France.
  • Additionally, India has entered into Memoranda of Understanding (MoUs) with countries like Armenia, Sierra Leone, Suriname, and Antigua and Barbuda to share India Stack technologies and expertise.
  • India’s initiatives under the G20 include the establishment of the Global Digital Public Infrastructure Repository and the Social Impact Fund, aimed at advancing Digital Public Infrastructure (DPI) in the Global South.

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