Europe payment link must’t be hobbled

India and the European Central Bank have entered the "realisation phase" of linking the Unified Payments Interface (UPI) with Europe's TARGET Instant Payment Settlement (TIPS) system, in a rare moment where regulators are making life meaningfully easier for consumers.

- SHREY MADAAN

If implemented effectively, this will transform how millions of Indians in Europe send money home, how tourists pay abroad, and how small businesses transfer funds across borders. But as with every major digital-policy breakthrough, the promise will only hold if regulators resist the temptation to add new layers of fees, friction, and red tape.

For years, cross-border payments have been a stubborn outlier in the blooming digital world. Sending money from Europe to India still results in steep bank charges, hidden foreign exchange fees, and significantly long delays. Even the most advanced fintech solutions rely on intermediaries, which drives up prices, limits transparency, and erodes consumer confidence. UPI-TIPS has the potential to change that dynamic entirely. By linking two instant payment systems, transfers can move directly between Indian and European users in real-time, without the need for a chain of correspondent banks in the middle.

For consumers, the benefits are substantial. Students, workers, and families split across continents will no longer need to wait days for remittances to settle. Immediate liquidity can make an enormous difference during emergencies, and lower fees ensure that more of the sender's money reaches the recipient. Small and medium-sized businesses, which are often hit hardest by costly and slow international payments, stand to gain from lower transaction costs (reducing the effort in time and money to arrange deals), thereby boosting their cash flow and competitiveness.