India to launch NPCI developed UPI payment service in Maldives

India and Maldives have recently taken a significant step towards strengthening their economic partnership by signing an agreement to introduce the Unified Payments Interface (UPI) in the Maldives.

According to India's External Affairs Minister S. Jaishankar, the initiative is expected to have a "very positive" impact on the archipelago nation's tourism sector. 

The Memorandum of Understanding (MoU) was signed during Jaishankar's three-day official visit to the Maldives, marking a new chapter in the bilateral relationship between the two countries.

The role of UPI in financial inclusion

Developed by the National Payments Corporation of India (NPCI), UPI is an instant real-time payment system that facilitates inter-bank transactions through mobile phones.

Addressing the press alongside his Maldivian counterpart, Moosa Zameer, Jaishankar emphasized how UPI has "revolutionized digital transactions" in India.

He noted that the system has significantly advanced financial inclusion in India, with 40% of the world’s real-time digital payments now taking place in the country. The introduction of UPI in the Maldives is expected to bring similar benefits, making financial transactions more accessible and efficient.

Impact on tourism

Tourism is the backbone of the Maldivian economy, contributing nearly 30% of its GDP and generating over 60% of its foreign exchange.

The introduction of UPI is anticipated to greatly benefit the tourism sector by simplifying payment processes for both local and international visitors.

Jaishankar expressed optimism that the first UPI transaction in the Maldives would take place soon, enhancing the overall experience for tourists and supporting the growth of the sector.