The Prime Minister of India, Narendra Modi, has invited BRICS countries to adopt the Unified Payments Interface (UPI) systems. UPI is among the most successful payment methods, providing smoother and faster transactions. If the alliance accepts Modi’s invitation, the trade settlement among member nations will experience a complete overhaul.
The United Arab Emirates (UAE), which is a BRICS member, already uses the UPI payment method. Apart from the UAE, the Maldives, Bhutan, Nepal, Singapore, and Sri Lanka use the payment interface. Cash usage in these countries is diminishing, with over 40% to 50% of transactions being settled online.
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India Could Make BRICS Get a Boost via UPI Payments
UPI payments could boost the BRICS alliance, allowing them to explore the new payment interface. The payment mechanism could be an alternative system dominated by the West, giving emerging economies autonomy over their finances. India is pulling all the cards to its favor by extending the system to neighboring countries.
“India has also been active in two particular spheres. The first is imports of Russian oil. The second is India developing its own capabilities — it has one of the best electronic payment systems now, and it’s starting to extend this to neighboring countries. That’s going to be very attractive to others — if you get disconnected by a Western system, this might provide a good alternative,” said Stanford University Professor Matteo Maggiori to the Economic Times.
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After India’s UPI success, BRICS member China is also developing a payment and settlement system. The move is to insulate themselves from US and Western pressures and diminish the highhandedness of the White House. Both countries are trying to offer an alternative system where developing nations hold the key. The US influence could gradually fade out if the alliance accepts India’s UPI or China’s upcoming payment interface.
