Coalitions at WTO to help India push for open payment systems adoption, cut remittance cost, says report
The dominance of a few large players in the market contributes to these high costs’
Building coalitions with other WTO members will help India push for the adoption of open and interoperable payment systems like UPI with a view to cut the cost of money transfers or remittances, a report by think tank GTRI said on Monday.
The dominance of a few large players in the market contributes to these high costs, through complex and opaque fee structures, the report said. It added that India’s recommendations to tackle this include encouraging digital transfers, fostering interoperable systems, promoting competition, streamlining regulations, and enhancing pricing transparency.
In the ongoing WTO’s 13th Ministerial Conference (MC13) in Abu Dhabi, UAE and India will make a strong push for the adoption of open and interoperable payment systems, among WTO members.
The report said that this proposal is driven by India’s belief that such systems can streamline global digital payments, and cut costs by fostering innovation and competition in the remittance market. This will not only benefit individual families but also contribute to broader economic development and poverty reduction efforts, it said.
It added that the challenge of high remittance costs, averaging 6.18 per cent globally ‘well above the United Nation’s target of 3 per cent ‘ is a key issue India aims to address.
“When UPI is adopted at a large scale costs may go down to 2 per cent level. With Global remittances at $860 billion in 2023, widespread adoption of UPI may result in savings of $35 billion annually. India’s push for UPI at the MC13 also showcases its leadership in digital payment technologies,” GTRI Founder Ajay Srivastava said.
MC is the highest decision-making body of the 164-member Geneva-based WTO (two more countries - Comoros and Timor-Leste will become members from today).
Trade ministers of these countries are gathering in Abu Dhabi to discuss a wide range of issues such as agriculture and fisheries subsidies. Srivastava said that while the WTO does not have specific rules governing remittances, India may seek to leverage existing agreements such as the General Agreement on Trade in Services (GATS), the Agreement on Technical Barriers to Trade (TBT), and the Agreement on Trade Facilitation (TFA) to advocate for policy changes that facilitate cheaper and more efficient remittance services.
