Japan “seriously thinking” about joining UPI payments system: Minister

Taro Kono, the Minister of Digital Affairs of Japan, told a news channel that the country was considering joining the Indian-led payments system

Japan’s Minister for Foreign Affairs Taro Kono. | Photo Credit: Reuters

Japan is “seriously thinking” about joining the Unified Payments Interface (UPI) network to allow cross-border payments between Japanese residents and those in India, and other countries like Singapore and Thailand who are joining the network, according to Taro Kono, the country’s Minister of Digital Affairs.

UPI “is a very convenient system of payment, where we can increase the interoperability of our payment system between Japan and India, or other countries such as Singapore, Thailand ... I heard UAE is also joining,” Mr. Kono told the WION news channel on May 18. “It could be another standard of cross-border tele-payment system.” Apart from Singapore, Thailand and the United Arab Emirates, other countries that have shown interest in UPI include Bahrain, Mauritius and Indonesia.

As an inter-bank payments system bringing more retail transactions under the digital net, UPI is assuming more and more importance for the government, which continues to spend on incentives for merchant fees on transactions. Credit on UPI may soon expand to more banks, with a potential for impact on credit card networks like Visa and Mastercard.

Japan and India are trying to “promote digital cooperation,” Mr. Kono said. India was a guest country at the G7 group of countries’ meeting of Digital and Tech Ministers of the grouping, with Indian Minister of Electronics and Information Technology Ashwini Vaishnaw representing the country in Tokyo.

“Also, we are contemplating how we can mutually recognise EID while starting with cooperation,” Mr. Kono said, in an apparent reference to digital IDs. The declaration issued by the digital ministers on April 30 says that the G7 countries agree to “share and accelerate best practices on digital identity and credentials and support discussions on the ongoing development of the OECD draft recommendation on the governance of digital identity.”

Election interference

Mr. Kono alluded to allegations of Chinese election interference in his remarks during the interview. “We just had our by-elections at the national level,” Mr. Kono said. “We feel that there have been a lot of intervention in that. So I think we need to really be careful and come up with some creative ideas on how we can minimise the impact of intervention or meddling by some dictatorship.”