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The Reserve Bank of India (RBI) and NPCI International Payments Limited (NIPL) have initiated the realization phase of UPI-TIPS Link after sustained engagement with the European Central Bank (ECB).
 
About UPI and TIPS

• UPI (Unified Payments Interface) is a real-time payment system developed by India that facilitates instant money transfers between bank accounts using mobile devices.
• TARGET Instant Payment Settlement (TIPS) is a pan-European instant payment settlement system launched by the Eurosystem in 2018, allowing instant settlement of payments in central bank money, available 24/7 with settlement within seconds.

 Purpose and Benefits of the UPI-TIPS Link

• The linkage facilitates cross-border payments and remittances, making international transfers between India and Europe faster and more affordable.
• It aims to boost payment interoperability, helping consumers and businesses on both sides to send and receive money instantly regardless of the time or day.
• The initiative aligns with the G20 roadmap to enhance cross-border payments by making them cheaper, more efficient, transparent, and accessible.

 Operational Aspects

• Both UPI and TIPS systems handle instant payments but operate in distinct jurisdictions; their interlinking will require technical integration, risk management, and settlement arrangements.
• TIPS supports multiple currencies including the Euro and allows transactions to settle in 10 seconds or less.
• Banks and payment providers participating in TIPS must hold accounts with their central banks and maintain liquidity to settle these instant payments securely.

 
This strategic partnership between 'India's UPI' and the EU's TIPS system represents one of UPI's first major tie-ups outside Asia and is poised to significantly enhance cross-border payment infrastructure between India and Europe.​

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