Through remittance network, India competes with SWIFT

The National Payments Corporation of India (NPCI), the public-private payments incubator operating within the country’s central bank, announced plans to build international digital payments infrastructure for the country’s 32 million expats. The NPCI previously built India’s domestic digital payments rails, the Unified Payments Interface (UPI).

Why should we care?
The NPCI says this new system is an opportunity for India to expand its successful digital payments technology to other corners of the globe—making the country’s annual inflow of $87B in remittances more efficiently transferred in the process. But this development is also an opportunity to scale India’s financial influence beyond its borders. “For the markets where Indians travel frequently, we will build acceptance for our instruments,” said Ritesh Shukla, CEO of NPCI. By partnering with fintechs, governments, and other services abroad (especially with smaller countries in India’s sphere of influence like the Maldives or Nepal), India can deepen other countries’ dependence on Indian consumption, strengthening India’s diplomatic power through economic muscle. What’s more, this new network competes with more established networks like SWIFT, which can potentially dull the effects of SWIFT’s international policies, especially as they relate to sanctions against Russia. The more other countries adopt the NPCI’s rails, the less Russia is excluded from international financial flows.