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UPU to Assess UPI for Cross-Border Remittances

  • 19 Jul 2023
  • 5 min read

Source: PIB

Why in News?

The Universal Postal Union (UPU) has announced plans to evaluate the integration of the Unified Payment Interface (UPI) with cross-border remittances using the global postal network.

  • This evaluation aims to explore the potential of UPI in facilitating secure and efficient international money transfers.

What are the Benefits of Integrating UPI with UPU?

  • UPI offers a secure, convenient, and real-time payment experience, making it a promising platform for cross-border remittances.
  • Leveraging the global postal network, which has extensive reach and infrastructure, can further expand the reach of UPI-enabled remittances.
  • The integration of UPI with postal channels can provide a reliable and accessible remittance solution for individuals, particularly in remote areas where traditional banking services may be limited.
  • This initiative aligns with UPU's goal of promoting efficient and inclusive postal services globally.

What is Universal Postal Union (UPU)?

  • About:
    • The UPU is a United Nations specialized agency and the postal sector's primary forum for international cooperation.
    • UPU is the second oldest international organization.
  • Establishment and Structure:
    • The UPU was established in 1874 through the Treaty of Bern.
    • UPU's headquarters are located in Bern, Switzerland.
    • The organization consists of four bodies: Congress, the Council of Administration (CA), the Postal Operations Council (POC), and the International Bureau (IB).
    • It also oversees the Telematics and Express Mail Service (EMS) cooperatives.
  • Membership:
    • Any member country of the United Nations can become a member of the UPU.
    • Non-member countries of the United Nations can join the UPU if approved by at least two-thirds of the member countries.
    • The UPU has now 192 member countries.
      • India joined the UPU in 1876.
  • Role and Functions:
    • UPU coordinates postal policies among member nations and the global postal system.
    • The union sets rules for international mail exchanges and makes recommendations to stimulate growth in mail, parcel, and financial services volumes.
    • It aims to improve the quality of service for customers and promote efficiency in international postal operations.

What is UPI?

  • UPI is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer.
    • VPA is a unique identifier assigned to an individual to facilitate the transfer of funds through a digital payments system.
  • It is a user-created identifier that can be used instead of providing sensitive bank account details while making payments.
  • It eliminates the risk of sharing bank account details by the remitter. UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments, and it also enables a user to send or receive money.

UPSC Civil Services Examination, Previous Year Question (PYQ)


Q1. With reference to digital payments, consider the following statements: (2018)

  1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
  2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Ans: (a)

Q2. Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’? (2017)

(a) Mobile wallets will not be necessary for online payments.
(b) Digital currency will totally replace the physical currency in about two decades.
(c) FDI inflows will drastically increase.
(d) Direct transfer of subsidies to poor people will become very effective.

Ans: (a)

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