During the development and release of Tez (now rebranded as Google Pay) in India, Google worked closely with the National Payments Corporation of India to integrate Tez with UPI (Unified Payments Interface) — a system for instant interbank transfers. Since then, UPI has seen broad success. Now the US Federal Reserve is considering implementing a similar program, and Google is champing at the bit to offer its input.
The tech giant sent a letter to the Federal Reserve, outlining the successes of UPI and offering advice in support of FedNow, the Federal Reserve Board's proposed RTGS (Real-Time Gross Settlement service). The service would allow instant transfer of funds between banks, similar to UPI.
With UPI's interbank transfer system, funds instantly change hands — as opposed to the archaic system still in use in the US, where transactions are processed at midnight and transfer of funds can take some time. The program's uniform API has allowed third parties to successfully develop around the program, and adoption has exploded over the last few years. Use of debit, credit, and pre-paid cards has nearly doubled in India since the inception of the program, and now nearly 10 percent of India's GDP moves through UPI.
Google believes FedNow could bring similar benefits to the US, stimulating the economy and simplifying the transfer of funds. The company suggests that the Federal Reserve implements low fees, allows low- and high-value transfers, and uses standardized messaging and API integration to allow quick and easy adoption of FedNow. If all goes well, the Reserve intends to implement the program somewhere from 2023 to 2024.