Japan Explores Ways to Join India’s UPI Payment System
Japan is exploring ways to join India’s Unified Payments Interface (UPI) payment system, according to a report by Nikkei Asia. The move is aimed at increasing cashless payments between the two nations and advancing digital payments in Japan, where the use of cash is still dominant. The report added that several Japanese companies have applied to join the UPI network.
The UPI is a real-time payments system that allows users to transfer money between bank accounts via their mobile phone. It was developed by the National Payments Corporation of India (NPCI) and launched in 2016. Since then, it has become the most popular digital payment system in India, with over 2 billion transactions processed in October 2021 alone.
According to the report, Japan’s financial authorities have already started discussions with their Indian counterparts about the possibility of joining the UPI system. The Japanese government is also said to be considering providing financial incentives to Japanese companies that adopt the UPI system for their transactions.
Joining the UPI network would enable Japanese firms to use the platform to make electronic payments to Indian companies and individuals. It would also facilitate cross-border payments between Japan and India, reducing the need for traditional banking channels and the associated costs and delays.
The move comes as Japan seeks to increase its adoption of digital payments and reduce its reliance on cash transactions. Despite being a highly developed economy, Japan has one of the highest rates of cash usage, with around 80% of transactions still made using banknotes and coins.
The Japanese government has been promoting the use of digital payments in recent years, launching its own QR code payment system in 2019 and introducing tax incentives for cashless payments. The COVID-19 pandemic has also accelerated the shift towards digital payments as consumers avoid physical contact and cash handling.
By exploring ways to join the UPI payment system, Japan is taking another step towards a cashless future and strengthening ties with India in the digital payments space. If successful, the move could pave the way for increased collaboration between the two nations in this area, and provide a boost to the global adoption of digital payment systems.