Google Tells US Federal Reserve To Follow India’s UPI & proposed RTGS system

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Google Tells US Top Bank & US Federal Reserve To Follow India’s UPI & proposed RTGS system

India’s 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.

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.

Mark Isakowitz, vice president in charge of government affairs and public policy for US and Canada at Google has cited the case of UPI to push for an open digital payments platform where technology players as well as small banks could innovate in the US. US Federal Reserve is the equivalent of the Reserve Bank of India.

The letter, as it came out in the public domain caused cheers among Indian tech entrepreneurs since it is the first time an Indian technology standard is being pushed for adoption in the US.

Citing three major positives for UPI, Isakowitz wrote that UPI works primarily through bank accounts, offering a real time fund transfer mechanism with an additional feature of being an open platform where technology companies can integrate their consumer applications with banks and network providers thereby propelling mass adoption.

While Google has detailed out what kind of features should be incorporated into FedNow, the instant fund transfer mechanism that is being developed in the US, Indian tech founders got excited at the prospect of having a UPI type payment mechanism in the most technologically advanced nation of the world.

“There are so many startups who are building products on UPI, imagine the advantages it will bring to them since they will be able to scale up in a market like the US easily,” said a founder of a fintech startup based out of Bengaluru.

A top banker told Tech2, UPI is being pushed to go global and now if it manages to draw the attention of the US Federal Reserve it will be big fillip for NPCI.

“After all discussions around UPI held directly with the Federal Reserve is of much more significance than any other country in the world,” he said.

Google has even stressed on the point mentioning how UPI allows tech companies to work closely with banks thereby keeping the liquidity within the regulated domain. This can be a win-win for all parties involved. Besides Google, industry sources have pointed out other American tech giants are also pushing for a mechanism like UPI in their country of origin.

Every technology innovation comes with its own sets of positives and negatives, but what remains the biggest take away from the letter is that India has managed to create a benchmark in digital payments globally with UPI. Singapore, few countries in the Middle East have already started adopting these standards, may be it is not far away that it will find adoption in the large developed economies as well.

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.

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Good Going BHIM UPI blush🥰