The Reserve Bank of India (RBI) announced on Friday that it has reached an agreement with the European Union’s central banks to start the initial phase of linking domestic payment systems.
This initiative will connect India’s Unified Payments Interface (UPI) with Europe’s TARGET Instant Payment Settlement (TIPS), allowing faster, cheaper, and more secure cross-border payments. The move is part of a broader effort to integrate global payment infrastructures and reduce reliance on traditional intermediaries such as SWIFT.
According to the European Central Bank (ECB), the Governing Council has decided to advance the “realisation phase” of interlinking TIPS with UPI and the Nexus Global Payments platform. This follows exploratory work initiated in October 2024, which confirmed the feasibility of linking the two systems European Central Bank.
The RBI emphasized that the initial phase will focus on technical integration, regulatory alignment, and pilot testing, with full-scale implementation expected in subsequent stages. Once operational, the linkage will make it easier for businesses and consumers in Europe and India to send and receive payments instantly, including remittances.
Officials say the project will:
Boost trade and investment flows between India and Europe.
Lower transaction costs for remittances and cross-border transfers.
Enhance financial inclusion by expanding access to digital payment systems.
Strengthen economic ties between the two regions.
Analysts note that this collaboration reflects a growing global trend toward interoperable payment systems, as countries seek to modernize financial infrastructure and reduce friction in international transactions.
