SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
National Payments Corporation of India (NPCI)
NPCI BHIM Services Limited (NBSL) has announced a strategic partnership with Canara Bank to integrate UPI-based digital payments into the bank’s application, Canara ai1Pe. This collaboration utilizes BHIM’s specialized bank plugin capabilities to support UPI services for both customers and non-customers of the bank. By leveraging NBSL’s technology backend, Canara Bank becomes the first institution to adopt this plug-and-play approach, ensuring faster adoption of new UPI features while maintaining high standards of compliance, reliability, and system scalability.
Through this integration, Canara Bank gains immediate access to the latest UPI functionalities and upgrades launched by the BHIM Payments App. This model allows the bank to significantly reduce the costs and resources traditionally required to develop and maintain an independent UPI interface. The partnership is designed to enhance operational resilience and ensure that the bank’s digital payment ecosystem remains in constant adherence to evolving regulatory requirements.
What are ‘Bank Plugin Capabilities’ in the UPI ecosystem? These are pre-built, secure software modules provided by entities like NBSL that banks can “plug” into their existing mobile applications. Instead of a bank building a UPI payment interface from scratch—which requires complex coding for security, transaction processing, and regulatory compliance—they use the plugin to instantly enable these services. This allows the bank to focus on its user interface while the plugin handles the technical backend, ensuring that every time a new feature like ‘UPI LITE’ or ‘Conversational Payments’ is launched, it is automatically updated within the bank’s app.
Policy Relevance
This partnership represents a significant shift in digital public infrastructure (DPI) delivery, moving toward a “Platform-as-a-Service” model to accelerate financial inclusion and technological parity among banks.
Strategic Impact for India:
Accelerated Feature Adoption: Enables banks to deploy the latest UPI innovations (such as credit-on-UPI or global payments) simultaneously with the BHIM app, preventing a technological lag for public sector bank users.
Cost and Resource Optimization: By utilizing a shared technology backend, banks can redirect capital from maintenance and compliance-heavy IT development toward core banking innovations.
Systemic Scalability: The use of NBSL’s specialized infrastructure ensures that the bank’s payment systems can handle the massive surge in transaction volumes without compromising on reliability.
Strengthening Digital Sovereignty: As NBSL is a wholly owned subsidiary of the NPCI, this collaboration reinforces the domestic control and security of India’s retail payment systems.
Relevant Question for Policy Stakeholders: How will the widespread adoption of standardized UPI plugins by diverse banks impact the competitive landscape for third-party application providers (TPAPs) in the digital payments market?
Follow the full news here: NBSL and Canara Bank Partner to Power UPI Payments