Favara and India's UPI to be integrated

An agreement has been signed today to integrate Maldives' instant payment system Favara with India's Unified Payment Interface (UPI) to facilitate secure, seamless financial transactions between India and Maldives.

UPI is the official digital payment system used in India. UPI transactions are offered at all levels of businesses in India, from major outlets to street vendors.

The agreement was signed between Maldives Monetary Authority (MMA) and India's NPCI International Payments Limited (NIPL).

The MMA stated that the agreement marks a significant step toward reinforcing the national financial system and enhancing payment infrastructure.

With this arrangement, financial transactions between Maldivian and Indian residents are expected to be conducted with greater ease, enhanced security, and reduced costs, as per the MMA.

Meanwhile, Bank of Maldives has today introduced Indian Rupee accounts.

MMA said that this falls in line with their three year strategic plan in developing Maldives' payment infrastructure, connecting with international networks and establishing facilities for foreign transactions. The aim is to offer means of convenient foreign transactions and equitable access to financial services, as well as increase financial inclusion, the MMA stated.

The integration of Favara and UPI will be conducted in two phases, according to the central bank. In the first phase, instant transactions between individuals from India and Maldives will be facilitated early next year. In phase two, use of QR codes in merchant payments will be enabled.

In this service, each country will be using their local currency. As such, Maldivians traveling to India will no longer need to source USD, and can instead conduct transactions in Indian Rupees, while Indians in Maldives can use Maldivian Rufiyaa.

NIPL has currently introduced similar services through UPL in countries such as Singapore, Sri Lanka and Nepal.

MMA is also working on establishing a separate company for developing Maldives' payment infrastructure - Payment Maldives. This company will introduce innovative payment services through new technology, MMA said. This model, they said, has been successfully adopted in many other countries, including Canada, Jordan, India, Thailand and Saudi Arabia.

MMA also aims to compile a National QR Code Standard. The purpose of this is to streamline QR codes of banks and payment services to align with a common standard, and be interoperable QR codes. This will enable the introduction of innovative, easy to use services, MMA said.