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UPI’s Global Expansion: A New Era of Cross-Border Transactions

UPI’s Global Expansion: A New Era of Cross-Border Transactions
National Payments Corporation of India, the agency tasked with operating UPI in India and abroad, is set to double UPI acceptability points in the UAE and Singapore.

India’s UPI, or Unified Payments Interface, is now expanding its reach beyond borders. This month, Indians can use UPI to buy tickets to visit the Eiffel Tower in Paris. This marks the beginning of UPI’s international journey.

Indians can now transact using UPI at nearly 3 million merchants across seven Asian countries. Additionally, they can also send money from the UAE and Singapore, which together accounted for a quarter of the $125 billion remitted to India in 2023.

The numbers are small compared to local transactions, but they are expected to grow rapidly. UPI has seen tremendous growth domestically, from 920 million transactions in 2017-18 to 84 billion in 2022-23. The target is 1 billion transactions per day by 2026-27.

This global expansion of UPI was first recommended by a committee led by Nandan Nilekani. The aim is to facilitate real-time, low-cost cross-border transactions and promote India’s digital finance architecture in countries with trade, travel, and diaspora connections.

While progress is visible, there are challenges ahead. Merchant visibility and transaction costs need to be addressed. UPI’s leaner model has the potential to reduce transfer fees, but lowering foreign exchange conversion costs remains a challenge.

Raising transaction value limits and resolving cross-border payment disputes are among the hurdles UPI must overcome to scale up its global presence.

As NPCI looks to expand UPI to more countries, other nations are also advancing their payment systems. However, UPI’s open architecture and interoperability give it an advantage over many private wallets dominating other markets.

While full adoption may be challenging, NPCI’s success could pave the way for exporting India’s digital infrastructure to other countries, enhancing India’s economic and diplomatic influence on the global stage.


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