India and Israel Forge Ahead with UPI Integration: A New Era for Digital Payments

Strengthening Digital Ties Between India and Israel

Tel Aviv: On Thursday, India and Israel took significant steps to enhance their digital and financial collaboration by facilitating the cross-border application of the Unified Payments Interface (UPI).

This initiative aims to integrate UPI with Israel's local payment systems, thereby streamlining digital transactions and making them more cost-effective.

The agreement to link UPI was finalized during the concluding day of Prime Minister Narendra Modi's visit to Israel.

PM Modi expressed, "We have decided to establish the Critical and Emerging Technologies Partnership, which will invigorate our cooperation in fields like AI, quantum technology, and critical minerals."

He also conveyed his satisfaction regarding the agreement for UPI's implementation in Israel.

This development is anticipated to simplify cross-border payments for businesses in both nations, reducing transaction costs and expediting settlement times.

"We will advance our collaboration in civil nuclear energy and space exploration. Together, we will create innovative agricultural solutions and establish villages of excellence," the Prime Minister added.

The UPI framework has demonstrated that inclusivity and scalability can coexist, proving that a public, interoperable model can outperform private networks. Currently, UPI operates in over eight countries, including the UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, Mauritius, and Qatar.

An independent study commissioned by India's Finance Ministry indicates that UPI has become the preferred payment method, representing 57% of all payment transactions in India, outpacing cash transactions at 38%. This shift is largely attributed to its user-friendly nature and instant fund transfer capabilities.

Digital payments have become the norm in daily transactions, with 65% of UPI users engaging in multiple digital transactions each day.

The preference for UPI is especially strong among younger users aged 18 to 25, with adoption rates reaching 66%, reflecting a significant shift towards digital-first financial behaviors, according to the study.

The report emphasizes that incentives have been crucial in lowering cost barriers for merchants and acquiring banks, facilitating merchant onboarding, and fostering trust in digital payment systems across various income levels and regions.