India's UPI: A Leader in Digital Payments

India has emerged as a pioneer in digital payments, with approximately 85% of all digital transactions occurring through the Unified Payments Interface (UPI). This was highlighted by Sanjay Malhotra, the Governor of the Reserve Bank of India (RBI), during a high-level dialogue in Washington, DC. He emphasized that India's journey with Digital Public Platforms (DPPs) could serve as a model for other nations seeking to enhance financial inclusion and innovation.

Malhotra discussed the significance of foundational platforms like Aadhaar and UPI, which have transformed public service delivery by making it resilient and cost-effective. He noted that these platforms have played a crucial role in digitalization, especially in government transfer payments. The UPI's ability to facilitate real-time payments has changed the landscape of financial transactions in India.

According to Malhotra, around 20 billion transactions are conducted through UPI each month, translating to a value of over USD 280 billion. This remarkable statistic underscores UPI's role as a catalyst for financial inclusion, enabling small vendors and micro-enterprises to accept digital payments and build their financial credibility. This access to formal credit has the potential to reduce costs significantly for these small businesses.

In the spirit of 'Vasudhaiva Kutumbakam'—the idea that the world is one family—Malhotra expressed India's commitment to international collaboration around DPPs. He reiterated the importance of developing such platforms as public goods, free from profit motives, and with necessary safeguards. This approach not only benefits India but also has the potential to impact global digital transformation positively.

Furthermore, Malhotra announced the Modular Open-Source Identity Platform (MOSIP), which India developed for digital identity management. This platform enables other countries to create their national digital ID systems efficiently. Currently, 27 countries are either adopting or considering MOSIP-based systems, showcasing India's leadership in providing essential services seamlessly and directly to citizens.

In conclusion, India's experience with UPI and DPPs illustrates how technology can facilitate inclusive growth and innovation. As the world looks towards digital transformation, India's journey provides valuable lessons in building sustainable and accessible public digital platforms.