Peru adopts India’s UPI system to boost financial inclusion

The Central Bank of the Republic of Peru (BCRP) will create a system similar to India’s Unified Payments Interface (UPI) under an agreement with the National Payments Corporation of India International Payments (NIPL). The Reserve Bank of India (RBI), which co-founded the National Payments Corporation, collaborated with the BCRP in the deal.

The new system will promote financial inclusion in Peru, which has a large unbanked population, as India’s UPI enables offline transactions . It will also enhance interoperability among domestic and international payment systems.

More payment options for Peruvians

BCRP Governor Julio Velarde said the system will play a role in “allowing new participants to enter the Peruvian ecosystem” while “complementing the existing payments industry.” No launch date was announced.

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UPI users can link multiple bank accounts in their mobile apps and use virtual payment addresses, their phone numbers and QR codes for payments on a 24-hour basis. According to a BCPR official statement :

“The BCRP’s objective is to promote greater access, security, redundancy and efficiency, as well as facilitate the introduction of new use cases in digital payments.”

The UPI gets around

NIPL was established in 2020. Sri Lanka, Mauritius, France, the United Arab Emirates, Singapore, Bhutan and Nepal officially support the UPI system. It is working with the Bank of Namibia to develop a UPI-like payment system there under an agreement reached in May.

Google Pay and financial institutions in the United States, Japan, China and Singapore have partnerships  with NIPL. Singapore was the first country the UPI spread to, partnering with PayNow in February 2023.

There are at least two stablecoins pegged to the Peruvian sol. The country has also been considering the introduction of a central bank digital currency (CBDC) since 2021. The BCRP has partnered with the monetary authorities of China, India, Singapore and Hong Kong on the development of a CBDC in 2021. That was a year before India officially launched its retail CBDC pilot .

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