Upgrade cross-border payments

With India being the world's largest recipient of remittances since 2022, the urgency to modernise its payment systems has never been greater

- PRATIK SHAH RANADURJAY TALUKDAR Respectively financial services leader, and partner and payments sector leader, EY India

IN A WORLD where economic and social ties transcend borders, cross-border payments are the backbone of international trade and global finance. For India, which receives the most remittances, these transactions are crucial to the country's economic fabric. In 2023, India received $120 billion in foreign remittances, with over 20% coming from the US and 18% from the UAE, per World Bank data.

Beyond personal remittances, payments also include services provided by Indian professionals and business remittances. However, beneath the impressive figures lies a somewhat inadequate payment infrastructure, marked by slow processing times due to intermediaries and high transaction costs. To maintain competitiveness in the global market, India must address these challenges through regulatory reform and innovation.

More to cross-border payments In FY24, India's IT exports welcomed $199 billion, while foreign domestic investments (FDIs) into India totalled $70.95 billion, per data from India Brand Equity Foundation. These figures underscore the need for an efficient payment infrastructure that can support growing cross-border transactions. Outbound payments also face challenges, from regulatory hurdles to inconsistent infrastructure, which must be addressed to enhance the country's global competitiveness and digital growth.