The Reserve Bank of India (RBI) has confirmed that India’s ubiquitous real-time payments platform, the Unified Payments Interface (UPI), will be interlinked with the European Central Bank’s (ECB) instant payments settlement system, TARGET Instant Payment Settlement (TIPS). This marks a major step in deepening cross-border digital payments between India and the Euro Area.
What the Announcement Means
The RBI said that after “constructive and sustained engagement” with the ECB, both sides have entered the “realisation phase” for the UPI–TIPS link.
Through this initiative, users in India and the EU could soon enjoy faster, low-cost, and more transparent cross-border remittances, especially between India and Eurozone countries.
RBI and NPCI International Payments Ltd (NIPL) will closely collaborate with the ECB to operationalise this link. This involves technical integration, risk management, and settlement arrangements.
Strategic Importance & Broader Context
TIPS is the Eurosystem’s instant payment system, enabling very fast payments in central bank money.
The decision aligns with the Eurosystem’s retail payments strategy, which aims to make cross-border payments cheaper, faster, and more inclusive.
From India’s perspective, this move supports the G20 roadmap for improving cross-border payments specifically, making remittances more affordable, efficient, and accessible.
According to the ECB, linking TIPS to UPI could also strengthen the euro’s international role by deepening payment corridors with non-euro markets.
Current Reach of UPI
NPCI runs UPI in India, where it processes billions of transactions per month.
Internationally, UPI is already accepted in several countries: Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the UAE.
NIPL is also helping other countries set up systems modeled on UPI. For instance, Peru and Namibia are exploring UPI-like real-time payment infrastructure.
Challenges & Next Steps
While the realisation phase has begun, actual deployment will require resolving complex technical and legal issues settlement mechanisms, currency risk, compliance, and regulatory alignment will all need to be addressed.
Risk management is especially critical given cross-currency flows and the need to maintain financial stability on both sides.
Both central banks will also likely monitor usage patterns closely, especially how many remittances flow through this corridor and how it impacts existing remittance services.
Implications for Users
For Indian migrants in Europe, or European businesses dealing with Indian partners, this integration could significantly reduce remittance costs and delay.
For Indian fintechs and SMEs, this could unlock smoother access to European markets and enable more seamless international transactions.
It may also encourage tourist and consumer payments: Indians in Europe and Europeans in India might increasingly rely on UPI-based payments, especially for small and frequent transactions.
Expert View
Akash Sinha, co-founder and CEO of Cashfree Payments, called the move “a signal of India’s emergence as a global benchmark for real-time payments.” He emphasized that real-time, low-friction money flows between India and Europe could “significantly uplift exporters, creators and the digital SME economy.”
