India and Israel Forge Stronger Financial Ties with UPI Integration

Strengthening Digital Partnerships

On Thursday, India and Israel took a significant step towards enhancing 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, streamlining digital transactions to be quicker and 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 enthusiasm, stating, "We have decided to establish the Critical and Emerging Technologies Partnership, which will invigorate cooperation in fields like AI, quantum technology, and critical minerals."

He also noted, "I am delighted that we have reached an 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.

The Prime Minister further mentioned, "We will advance our collaboration in civil nuclear energy and space sectors, and work together on innovative agricultural solutions, aiming to create exemplary villages."

The UPI framework has demonstrated that inclusivity and scalability can coexist, proving that a public, interoperable model can outperform private networks. Currently, UPI is operational 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 revealed 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 integral to daily transactions, with 65% of UPI users engaging in multiple digital transactions each day.

The preference for UPI is especially notable among younger individuals aged 18 to 25, with a 66% adoption rate, indicating a significant shift towards digital-first financial behaviors, as highlighted in the study.

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