Anindita Chatterjee
Updated on: October 16, 2024 8:30 pm GMT
On September 27, 2023, Trinidad and Tobago made history by becoming the first Caribbean nation to adopt a payments system similar to India’s Unified Payments Interface (UPI). This significant step was made possible through a partnership between NPCI International Payments Limited (NIPL) and the Ministry of Digital Transformation of Trinidad and Tobago. The collaboration aims to create a real-time payments platform that promises to transform how financial transactions are conducted in the country.
The Shift Toward Digital Payments
The new system will facilitate real-time payments for both person-to-person (P2P) and person-to-merchant (P2M) transactions, providing a modern alternative to traditional cash transactions. As cash usage decreases globally, this strategic move positions Trinidad and Tobago as a leader in adopting cutting-edge financial technology in the Caribbean.
A spokesperson from the Ministry of Digital Transformation highlighted that the initiative is expected to encourage innovation within the Fintech sector. He noted that it will enhance the technical resiliency of the current payment infrastructure while offering increased security through the reduced reliance on cash.
Moreover, the successful implementation of this platform is vital for promoting financial inclusion, particularly for Trinidad and Tobago’s unbanked citizens. “We intend to leverage India’s experience with UPI to bring similar benefits to our citizens,” the spokesperson added.
Learning from India’s Success
Trinidad and Tobago’s Finance Minister Colm Imbert has expressed a desire for countries to emulate India’s success in financial inclusion. In August 2024, during the launch of the National Financial Inclusion Survey Report, he noted, “Countries like India, which previously had a large financially underserved population, have become major players in the digital payment space.”
India has seen remarkable growth in digital transactions. In 2022, 46% of global real-time digital transactions occurred in India, solidifying its position as the second-largest digital market in the world, just behind China. As a result, countries are looking to India’s model for inspiration as they develop their payment systems.
International Expansion of UPI
NPCI is not only focused on Trinidad and Tobago but is also expanding its influence through various partnerships worldwide. Recently, NIPL announced collaborations with:
- Central Reserve Bank of Peru (BCRP): Aiming to implement a UPI-like real-time payments system in Peru.
- Bank of Namibia: To develop a payment system similar to UPI that strengthens the nation’s financial infrastructure.
Ritesh Shukla, CEO of NPCI International, emphasized that these collaborations focus on improving financial access for underserved populations in these countries.
In addition to developing new systems, NIPL is also enhancing the convenience of UPI transactions for Indians traveling abroad. Partnerships with banks and merchants in countries such as the United Arab Emirates, Singapore, Nepal, and Bhutan will allow UPI transactions at select locations, catering to the needs of Indian travelers.
Future Goals for UPI Expansion
The Reserve Bank of India (RBI) has set ambitious targets to further expand UPI’s reach. According to the RBI’s annual report, there are plans to work with NIPL to extend UPI to 20 countries by 2028-29. This effort aims to position UPI as an attractive option for countries seeking a ready-made Fast Payment System (FPS).
The RBI report also states that India can offer technical assistance to standardize processes and protocols across nations, making them compatible with UPI. This global strategy may significantly influence how real-time payments are conducted worldwide, bolstering the case for adopting similar models in other regions.
Conclusion
The partnership between NPCI and Trinidad and Tobago marks a pivotal moment in the Caribbean’s journey toward digitalization. By adopting a UPI-like payments system, Trinidad and Tobago is setting the stage for greater financial inclusion and modernizing its payment infrastructure. As this system takes shape, it may serve as a model for other nations considering similar transitions.
This change shows how creative the Fintech industry can be and helps reduce our reliance on cash. Trinidad and Tobago is joining the global shift towards using less cash and more digital payments. This effort can inspire other countries to see the advantages of modern payment methods. As the world moves towards a new way of handling money, Trinidad and Tobago is ready to take the lead in this exciting digital journey.
