Google cites UPI learnings to US Federal Reserve for proposed RTGS system

Our Bureau Mumbai | Updated on December 14, 2019

File photo   -  Twitter/@GooglePayIndia

Proposed FedNow likely to be introduced by 2023-2024

India’s Unified Payments Interface (UPI) has been getting global attention for quite some time. Now Google LLC has cited its example to the United States Federal Reserve for its proposed FedNow -- a new interbank gross settlement service.

“Google's integration of Google Pay with UPI, in collaboration with four of India's largest banks, demonstrates Google's commitment to innovation through collaboration with government and financial services partners,” Google LLC has said in a letter to the Fed’s Board of Governors on Novemebr 7.

In the letter seen by BusinessLine, Mark Isakowitz Vice President, Government Affairs and Public Policy, US and Canada, Google has said that UPI was thoughtfully planned and critical aspects of its designs led to its success.

He pointed out that UPI is an interbank transfer system, it is a real time system and is "open" - meaning technology companies can build applications that help users directly manage transfers into and out of their accounts held at banks.

“The approach in India attained amazing results for banks, consumers, other players within the payments ecosystem and India's central bank,” the letter said, adding that the approach in India attained amazing results for banks, consumers, other players within the payments ecosystem and India's central bank.

“This system successfully encouraged close collaboration between technology and financial services providers, and created winning opportunities across the ecosystem,” Google in the letter further said.

The US Federal Reserve had in August this year announced that it is working on FedNow RTGS, which would offer round the clock real time payment services 365 days a year. It is expected to be operational by 2023 or 2024 and would allow transactions up to $25,000.

“Google views digital commerce, and the emergence of new forms of payment systems, as essential to promoting an inclusive and more helpful payment system,” the letter from Google said, adding that the company fully supports the Federal Reserve's decision to deploy the FedNow RTGS, which can improve the accessibility and usefulness of payment systems for all Americans.

Based on its learnings from UPI, Google has suggested that industry and government should work together to grow ecosystems where payments are inclusive. It has also said it sees the future of online payments as mobile first, and also make digital payments simple and helpful.

It has also recommended other measures to the US Fed including supporting real-time low-value and high-value payments, using standardised messaging protocols, low fees and open systems.

UPI, which was launched in April 2014, allows immediate money transfer through mobile device round the clock 24x7 and 365 days. By November this year, 143 banks were live on the UPI platform and the number of transactions had surged to ₹121.87 crore.

Published on December 14, 2019

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