The European Central Bank (ECB) Governing Council has agreed to move forward with efforts to connect the Eurosystem’s TARGET Instant Payment Settlement (TIPS) system to other real-time payment networks worldwide, including India’s Unified Payments Infrastructure (UPI).
This decision supports the aim of improving cross-border payment processes for European businesses and individuals, particularly in the context of remittances.
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Following exploratory work launched in October 2024, which studied the potential for interlinking TIPS with both UPI and Nexus Global Payments, the council will now proceed with the realisation phase for the TIPS-UPI linkage.
This phase involves finalising legal frameworks and completing technical preparations.
Simultaneously, the council will continue to explore the possibility of integrating TIPS with Nexus Global Payments while working on the required legal agreements.
In September this year, the council began evaluating whether TIPS could also be connected to the Swiss Interbank Clearing Instant Payments platform.
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By GlobalDataECB noted that connecting TIPS with various rapid payment systems aligns with the Eurosystem’s retail payments strategy and the G20’s roadmap to make cross-border payments quicker, cost-effective and transparent.
This approach also aims to strengthen the euro’s global standing. The broader objective is to expand these connections to more international payment corridors in the future.
UPI, created by the National Payments Corporation of India and overseen by the Reserve Bank of India, handles one of the world’s largest volumes of instant payment transactions, according to ECB’s news release.
India is also said to be among the ten largest destinations for remittances from the euro area.
Nexus Global Payments is a multilateral system managed by Nexus Global Payments, designed to link fast payment services in several Asian markets.
Its initial phase will connect the systems of Bank Negara Malaysia, the Monetary Authority of Singapore, Bangko Sentral ng Pilipinas, Reserve Bank of India, and Bank of Thailand.
The concept was first developed by the Bank for International Settlements Innovation Hub Centre in Singapore.
