In this digital age, electronic communication is becoming more popular, and cashless payment systems are widespread in most nations. The unified Payment Interface (UPI) payment system is one of the fast and secure ways of money transfer services that are trending globally. With the increasing momentum of digital payments, the UPI payment system began revolutionizing banking methods and transforming user experiences. Recently, the news that Japan is studying whether to join India’s UPI payment system that was created by the National Payments Corporation of India has come into the picture when the Minister of Digital Affairs proposed the idea.
According to Taro Kono, the nation’s Minister of Digital Affairs, Japan is “seriously thinking” about incorporating the Unified Payments Interface (UPI) network to facilitate cross-border payments between residents of Japan and those in India and other countries like Singapore and Thailand that are also joining the network.
With the use of UPI, we can improve the compatibility of the payment system across Japan and India as well as other nations like Singapore and Thailand. Mr. Kono stated, “I believe UAE is also joining.” It might be a different type of international telepayment standard. Other nations that have expressed interest in UPI besides Singapore, Thailand, as well as the United Arab Emirates include Bahrain, Mauritius, and Indonesia.
With the government continuing to allocate money on rewards for merchant fees on transactions, UPI is assuming more and more significance as an inter-bank payment system that brings more buying and selling under the digital net. With the potential to have an effect under credit card networks such as Visa and Mastercard, credit on UPI may soon be extended to more banks.
According to Mr. Kono, Japan, and India are working to “promote digital cooperation.” India was a guest nation at the G7 group of nations‘ conference of their digital and technology ministers, and Ashwini Vaishnaw, the country’s minister of technology and information technology, represented it in Tokyo.
Several positive discussions to incorporate UPI have raised several questions about the motive behind it, and how this would affect the economic growth of both countries. Also how Japan’s thinking regarding joining the UPI payment system.Japan has continually embraced the adoption of innovations, including the implementation of robust payment systems. However, despite having various reliable payment options, the Japanese government has raised interest in the UPI payment system, which has been very successful in India. Not only Japan other countries are showing interest in UPI.
Reasons to consider Unified Payment Interface (UPI):
UPI is an instant real-time payment system created by the National Payments Corporation of India, which is a unified platform that allows users to link multiple bank accounts to a single mobile application. With this payment method, people can transfer funds with the help of virtual payment addresses with just one click. Moreover, UPI provides an environment for peer-to-peer, business-to-consumer, and consumer-to-business financial transactions. This offers a seamless experience for end-users while ensuring transparency and security of transactions (Reserve Bank of India, 2021).
Reasons for Japan to consider joining the UPI payment system Digital Payment Revolution
Japan is keen on promoting digital payments to reduce the dependence on cash transactions. A few years ago, most of their transactions used to be done using cash, but recently with the onset of the pandemic, the Japanese government has implemented policies that regulate the handling of cash by businesses. These policies aim at reducing the spread of the virus through cash transactions. This has led to a surge in digital payments in Japan, prompting the government to consider adopting more advanced digital payment methods such as the UPI payment system.
Japan’s interest in joining the UPI payment system can be attributed to several factors such as the digital payment revolution, boosting economic growth, cementing relations with India, and a more efficient payment method. However, this move poses significant challenges such as cross-cultural differences, compatibility issues, and regulatory and legal frameworks. Therefore, thorough considerations should be in place before joining. If properly implemented, the UPI payment system will provide more convenience and access to a large market, which would ultimately drive both countries’ economic development.
Published By Naveenika Chauhan