Christopher Waller, a member of the Federal Reserve Board of Governors, announced on August 28 that the United States is exploring the possibility of connecting some of its private banks to India’s Unified Payments Interface (UPI). Speaking at the Global Fintech Fest in Mumbai, Waller highlighted that the US currently lacks enough banks connected to create a comprehensive fast payments system due to stringent compliance and risk management needs. However, integrating with UPI could potentially accelerate the development of such a network.
Waller emphasized that the US must first establish a compelling value proposition for this integration, a process that would take time. He acknowledged that compliance and risk management, rather than technology, pose the most significant challenges to implementing a fast payments system. He praised India’s UPI for its rapid growth and successful public-private partnership, which has enhanced financial inclusion and low-cost digital payments.
The UPI, launched by the National Payments Corporation of India (NPCI) in 2016, has grown to process over 10 billion transactions monthly, with a total transaction value exceeding Rs 15 trillion. Waller noted that building on public sector foundations, private innovators could enhance payment systems while adhering to regulatory requirements. He also suggested that public-private collaboration would be essential in advancing cross-border payments.
Waller concluded by highlighting the importance of addressing legal, regulatory, and operational challenges, in addition to technology, to improve global payment systems. He mentioned that the G20’s roadmap aims to tackle cross-border payment issues and enhance global payment networks beyond local capabilities.
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