Why India’s UPI is Being Exported

We explore the policy and economic rationale behind UPI’s global push and its implications on fintech diplomacy.

India’s Unified Payments Interface (UPI) is no longer just a domestic marvel—it’s becoming a global playbook. What began as a real-time payments platform for India’s digital economy is now gaining traction across borders. From Singapore to the UAE, and from Sri Lanka to France, Indian policymakers are actively forging UPI linkages with foreign payment systems. But what’s driving this international push—and what does it mean for India’s fintech diplomacy?

UPI at Home: A Transformational Infrastructure

UPI has redefined how India transacts. In less than a decade, it has leapfrogged legacy banking systems and enabled over 14 billion monthly transactions—cutting across regions, income segments, and use cases. Powered by the National Payments Corporation of India (NPCI), it allows seamless, instant transfers with zero fees—between banks, wallets, merchants, and individuals.

Its design—open API-based, interoperable, and scalable—makes it a rare digital public good. Unlike private platforms, UPI is built as shared infrastructure, enabling both state and private innovation to coexist. It has become the backbone for everything from retail payments and bill collections to government benefits and microloans.

The Global Pivot: Why Now?

India’s decision to take UPI global is rooted in multiple strategic goals:

• Remittance Efficiency: India is the world’s top remittance recipient. Linking UPI with global payment systems can drastically reduce fees, time, and friction in inward remittances—especially for the Indian diaspora in the Middle East and Southeast Asia.
• Soft Power and Tech Diplomacy: Exporting a public digital infrastructure positions India as a thought leader in inclusive fintech. It builds diplomatic capital, enhances bilateral ties, and offers an alternative to Western-dominated financial rails.
• Standard-Setting: As digital public infrastructure becomes a hot topic globally, early movers like India can shape protocols and standards—particularly in the Global South—where countries are seeking low-cost, scalable payment frameworks.
• Economic Integration: Cross-border UPI linkages can deepen trade and tourism flows with partner nations by reducing currency exchange costs and settlement friction for small transactions.

Early Agreements and Expanding Footprint

Several countries have already signed MoUs or launched UPI-linked pilots:

• Singapore: UPI was integrated with Singapore’s PayNow system, enabling low-cost, real-time cross-border transfers.
• UAE: The Indian government is working with UAE authorities and banks to enable UPI use among Indian expatriates for remittances and retail payments.
• France: Tourists can use UPI at the Eiffel Tower and select merchants—part of India’s broader push into the Eurozone.
• Bhutan & Nepal: UPI acceptance for QR code payments has been introduced at merchant locations.

NPCI International Payments Ltd. (NIPL), a dedicated arm of NPCI, is spearheading these collaborations, positioning UPI as an exportable fintech infrastructure much like Estonia’s e-Residency or Brazil’s Pix.

Implications for India’s Fintech Ecosystem

The globalisation of UPI opens new doors for Indian fintech players, especially in areas like merchant acquiring, cross-border KYC, fraud analytics, and real-time settlements. Payment aggregators and banking-as-a-service startups can now scale beyond borders, leveraging UPI’s trust layer.

Moreover, integrating Indian banks into these cross-border payment corridors could allow them to serve diaspora communities more efficiently and capture a larger share of remittance and NRI banking flows.

Challenges on the Road Ahead

Despite its technical elegance, UPI’s global journey faces real-world challenges:

• Regulatory Harmonization: Each country has unique data protection, AML, and KYC frameworks. Aligning these with UPI protocols is complex and time-consuming.
• Currency Conversion: Real-time forex conversion and settlement need sophisticated backend infrastructure, dynamic pricing models, and low-cost liquidity pools.
• Adoption and Awareness: For UPI to succeed abroad, merchant networks, tourists, and expats need education, onboarding, and reliable customer support.
• Cybersecurity: Expanding payment rails means expanding threat surfaces. Ensuring real-time security monitoring and cross-jurisdictional fraud response is non-trivial.

UPI as a Template, Not Just a Tool

India’s digital stack—comprising Aadhaar, UPI, DigiLocker, and ONDC—is being closely studied by several countries looking to leapfrog into a digital-first economy. UPI is not just being exported as a product, but as a model of digital public infrastructure—low cost, interoperable, inclusive, and developer-friendly.

Multilateral organizations like the IMF, World Bank, and G20 have acknowledged the role such infrastructures can play in driving financial inclusion. India’s presidency of the G20 in 2023 highlighted DPI as a core agenda item, further legitimizing UPI’s global positioning.

The Diplomatic Dividend

Exporting UPI is not just an economic play—it’s a diplomatic signal. It reinforces India’s identity as a provider of affordable, inclusive technology. In a world increasingly divided along tech stacks (U.S., China, EU), India offers a third path—open, modular, and sovereignty-respecting.

This has ripple effects: from boosting India’s clout in global fintech forums to shaping standards for real-time cross-border payments, dispute resolution, and digital identity federation.

The Road Ahead

UPI’s global success will depend on how well India balances ambition with execution. Building trust across jurisdictions, sustaining security, and ensuring seamless user experience are essential. But the foundations are solid, the momentum real, and the implications far-reaching.

As India exports its payment rails to the world, it’s not just transferring technology—it’s transferring a philosophy: digital infrastructure should be public, powerful, and universally accessible.