By Jaspreet Kalra and Nikunj Ohri
MUMBAI/NEW DELHI (Reuters) – India is asking the Financial Action Task Force (FATF), a global money-laundering watchdog, to reduce compliance requirements for cross-border payments made through its homegrown system, several sources familiar with the discussions said.
Launched in 2016, the Unified Payment Interface (UPI) accounted for 83% of India’s digital payments volume in 2024, up from 34% in 2019, and dominates the domestic retail payments sector.
The government now wants to increase the use of its own payments network by Indians travelling abroad, which could potentially tap into a growing market, and make the global cross-border payments market more competitive.
But its expansion for cross-border payments has been hampered by compliance requirements on smaller payments, to which payments made via networks such as Visa, Mastercard, and SWIFT are not subject, the sources said.
Government officials raised the issue at an FATF conference in Mumbai this week, two of the sources said, declining to be named because they are not authorised to speak to media.
The FATF, India’s central bank and the federal finance ministry did not immediately respond to emails seeking comment.
Visa and Mastercard did not respond to requests for comment.
A final decision would depend on achieving a consensus among FATF member countries after the public consultation period, a third source familiar with the discussions said.
A public consultation on the FATF’s “travel rule”, which requires financial institutions to collect, hold, and transmit information about the sender and receiver of cross-border payments, is open until April 18.
In their current form, global anti-money laundering rules tend to favour both card networks and payments facilitated by the SWIFT payment system, the three sources said.
Central Bank Governor Sanjay Malhotra told the FATF gathering that “it would be desirable to make the (FATF’s) travel rule technology-neutral,” without specific mention of UPI.
India has so far inked deals with seven nations, including France and Singapore, which allow merchants to accept payments via the UPI.
($1 = 85.6175 Indian rupees)
(Reporting by Jaspreet Kalra and Nikunj Ohri; Editing by Rachna Uppal)
