.svg)
The Reserve Bank of India (RBI) has announced a trio of new partnerships that will bring instant payments linkages to three of its neighbours: Sri Lanka, Mauritius and Nepal.
Last week, the RBI confirmed that new bilateral payments linkages between India and Sri Lanka, and India and Mauritius, are now live.
The first transactions using India’s UPI were made in Sri Lanka and Mauritius respectively during a ceremony that was observed by the heads of state of the three countries.
In Sri Lanka, Indians can now use UPI apps such as PhonePe, Google Pay and Paytm to make person-to-merchant (P2M) payments where LankaPay is accepted (and vice versa).
LankaPay is Sri Lanka’s equivalent instant payments system and, like UPI, uses merchant QR codes to facilitate transactions.
The LankaPay tie-up stems from a “partnership vision” that was agreed to in July 2023 by Indian Prime Minister Narendra Modi and Sri Lankan President Ranil Wickremesinghe.
Under this vision, the two leaders agreed to prioritise the use of the Indian rupee in trade settlements, therefore forging “stronger and mutually beneficial commercial linkages” between the two countries.
They also agreed to implement UPI payments to further increase transactions between consumers and merchants across the two countries.
Speaking during the launch, Wickremesinghe said that more than 400,000 merchants in Sri Lanka will now be able to accept UPI payments.
This will benefit the more than 300,000 Indian tourists who visited Sri Lanka in 2023 and, in the other direction, the LankaPay connection will benefit the more than 350,000 Sri Lankan tourists who visited India.
India is Sri Lanka’s largest trading partner and its largest source of foreign direct investment (FDI).
UPI, RuPay combination hits Africa
In Mauritius, Indians can now use UPI apps to make P2M payments where the Mauritius Instant Payment System (IPS) is accepted, and Mauritians can use IPS when travelling to India.
Additionally, India’s RuPay debit and credit cards can now be used in Mauritius, making it the first African country to accept RuPay.
Under the RuPay partnership, banks in Mauritius will also be able to issue dual-network cards that run on both RuPay and a domestic network.
Travellers from Mauritius will be able to use these co-badged cards for making P2M payments when travelling to India.
“Thanks to the UPI and RuPay card systems, the need to purchase hard currency will reduce,” said India’s Prime Minister Modi.
“We can make payments in our own currencies, in real time, at a low cost and in a convenient manner.”
In future, Modi added that India and Mauritius will aim to establish similar linkages for remittances and cross-border person-to-person (P2P) payments.
“I look at this as an important part of developing further connectivity between our two countries,” he said.
“We hope we maintain the momentum to identify other areas of potential connectivity.”
Over the past five years, the RBI said India has invested heavily in Mauritius, both in fintech and in other sectors.
The growing ties between the two countries have led to more than 20,000 Indians taking up residence in Mauritius, and to more than 75,000 Indians visiting the country each year.
While Indian expats and students will benefit the most from UPI acceptance in Mauritius, Modi said he is confident that Indian tourists will also give priority to destinations where UPI is accepted.
India, Nepal agree cross-border remittance partnership
Finally, the central banks of India and Nepal have signed new terms of reference on the integration of their respective instant payments systems for cross-border transfers.
The agreement, signed on Thursday (February 15), will allow citizens in both countries to send low-cost, instant remittances to recipients back home.
However, the RBI did not provide an approximate launch date for the instant payments linkage.
