Japan is considering the adoption of India’s UPI (Unified Payments Interface) payments system as part of its efforts to enhance digital cooperation. The governments of Japan and India are exploring ways to promote interoperability and facilitate cross-border payments using digital systems.
Japan’s Minister for Digital Affairs, Kono Taro, expressed their interest in joining the Indian UPI payment system during an interview with Wion News. He previously hinted at dispatching a team to India to thoroughly evaluate the UPI platform.
If Japan decides to adopt UPI, discussions will arise regarding the possibility of connecting the payment systems of both countries. Minister Taro also mentioned the potential for cooperation between Japan and India in ensuring the security of telecommunication systems.
Although there was a minor decrease of 0.24% in UPI transaction volume in April 2023 compared to the previous month, UPI continues to exert significant influence in India’s digital payment landscape. According to data from the National Payments Corporation of India (NPCI), PhonePe, Google Pay, and Paytm together accounted for 94% of the market share in terms of UPI transactions.
In an interview on May 18, Minister Taro emphasized the convenience of the UPI payments system and its potential for cross-border transactions once other countries like Singapore, Thailand, and the UAE adopt it as a standard. He believes that increased interoperability could make UPI a widely accepted method for cross-border payments.
Additionally, Minister Taro discussed the mutual recognition of digital identities, highlighting India’s digital identity program as a foundation for achieving interoperability. The aim is to explore ways to recognize each other’s digital IDs, starting with cooperation between Japan and India.
During the G7 Digital Ministers Meeting, where India’s Telecom and IT Minister Ashwini Vaishnaw was present, the group agreed to establish a permanent secretariat on cross-border data flow. Minister Taro expressed hopes that the Indian government would join this international framework.
In response, Minister Vaishnaw praised India’s Digital India vision, stating that it has received positive recognition in various global forums such as the G20, SCO, and G7. He expressed gratitude to the Japanese digital minister for acknowledging and embracing Prime Minister Modi’s extensive vision of Digital India.
