In a significant milestone for the future of global digital payments, the Reserve Bank of India (RBI) has announced the beginning of the “realisation phase” for interlinking India’s Unified Payments Interface (UPI) with the TARGET Instant Payment Settlement (TIPS) system of the Eurosystem. This development marks a major step toward enabling faster, cheaper, and more accessible cross-border transactions between India and the Euro Area.
For several years, RBI has been actively pursuing cross-border connectivity for UPI, exploring collaborations with fast payment systems worldwide. These efforts align closely with the G20 Roadmap for Enhancing Cross-Border Payments, which emphasizes efficiency, affordability, transparency, and inclusivity in remittance corridors. The UPI–TIPS initiative represents one of the most significant responses to that global call to action.
Strengthening India–EU Financial Connectivity
UPI is already recognized as one of the world’s most advanced and scalable real-time payment systems. Meanwhile, TIPS — operated by the Eurosystem, which includes the European Central Bank (ECB) and national central banks from the Euro Area — offers instant settlement in central bank money across Europe.
For months, the RBI, along with NPCI International Payments Limited (NIPL), has been engaged in sustained dialogue with the European Central Bank to explore technical and strategic pathways for linking the two systems. This consistent engagement has now reached its next stage: both sides have formally agreed to commence the implementation phase of the interlinkage.
What the UPI–TIPS Link Means for Users
Once operational, the interlinking of UPI with TIPS is expected to:
1. Enable Faster and Cheaper Remittances
Cross-border transactions between India and Euro Area countries are likely to become significantly more cost-effective and near-instantaneous, eliminating the delays and high fees often associated with traditional banking channels.
2. Improve Transparency and Accessibility
The link aims to bring more clarity in fees, settlement times, and exchange rates, especially important for migrant workers, students, tourists, and businesses.
3. Boost Trade, Travel, and Economic Engagement
As financial flows become simpler, businesses will benefit from smoother payments, while travellers from both sides will gain from easier transactions for daily purchases.
Collaborative Road Ahead
The RBI and NIPL will now work closely with the ECB on the next steps, which include:
- Technical integration: Ensuring compatibility and seamless real-time communication between UPI and TIPS
- Risk management frameworks: Establishing secure protocols for authentication, authorization, and fraud prevention
- Settlement mechanisms: Aligning the systems to manage currency conversion and settlement finality
This phase is crucial because it sets the foundation for scalability and interoperability once the link goes live.
A Major Leap for Global Payments
The proposed UPI–TIPS interlinking underscores India’s growing leadership in digital payments and its commitment to building an interconnected global financial ecosystem. As the world moves toward frictionless, digital-first financial systems, this India–EU collaboration could become a benchmark for future cross-border payment arrangements.
The journey toward a fully operational UPI–TIPS corridor has begun — and its impact will be felt by millions of users across continents.