Cross-border payments and UPI revolution in India

UPI is revolutionising cross-border payments, expanding India’s digital payment influence through global integration, regulatory reforms, and strategic partnerships.

The introduction of the unified payments interface (UPI) in 2016 marked a transformative shift in India’s digital payments landscape. Designed for speed, interoperability, and user-friendliness, UPI has become the backbone of India’s payment ecosystem. While its domestic success is widely acknowledged, its growing role in cross-border payments is an emerging frontier with immense potential for international remittances and global commerce.

The UPI revolution: A digital payments game-changer

UPI is a real-time payment system developed by the National Payments Corporation of India (NPCI) that allows seamless fund transfers between banks using a mobile interface. Its key advantages include instant transactions, interoperability across banks and payment apps, low-cost processing, and enhanced security features. UPI has become India’s most popular digital payment method, and these strengths drive financial inclusion and economic growth.

UPI remitter: Top three members (January 2025)

Over 900 million mobile users and affordable internet access, around 400 million individuals actively use UPI today.

India’s cross-border payment transformation

India is rapidly advancing in global payments through regulatory reforms, tech-driven initiatives, and strategic partnerships.

Regulatory reforms enhancing cross-border trade

In January 2025, the RBI eased forex regulations to boost cross-border trade and internationalise the Rupee. Indian exporters can now open foreign currency accounts overseas, while authorised bank branches abroad can facilitate Rupee transactions for non-residents. These reforms promote Rupee-based trade settlements, reducing reliance on dominant global currencies.

Technological advancements driving global expansion

NPCI is driving UPI’s adoption worldwide. Agreements with Peru and Namibia are set to launch UPI-modeled systems by 2026–2027. UPI’s integration with Singapore’s PayNow enables real-time cross-border transactions, setting a precedent for future linkages. Efforts to make UPI interoperable with global payment networks are expanding seamless remittance solutions for Indian expatriates.

Strategic collaborations for local currency trade

India is forging direct currency settlement mechanisms to bypass third-party currencies. Talks with Russia focus on a Rupee-Ruble trade framework, while discussions with GCC nations aim to enable UPI-based remittances, benefiting Indian workers. Expanding UPI’s reach in emerging markets strengthens India’s digital payment influence.

Innovations for small and medium-sized businesses (SMBs)

In January 2025, PayU-backed BRISKPE launched a unified platform for cross-border payments tailored for Indian SMBs. This platform offers account-to-account transfers, card collections powered by PayU, and wallet-based collections through PayPal, providing SMBs with efficient tools to manage international transactions.

UPI applications in India: Top three members (January 2025)

Global expansion of UPI

UPI is steadily expanding internationally, enabling seamless global transactions:

• International merchant payments: Indian travellers can make QR code-based payments in Bhutan, Singapore, Nepal, UAE, and Mauritius via UPI-supported apps like PhonePe, Google Pay, and BHIM UPI.
• Cross-border remittances: UPI’s integration with systems like Singapore’s PayNow enables instant, cost-effective fund transfers.
• UPI One World Wallet: Designed for international visitors to India, this prepaid wallet allows UPI payments after completing a KYC process using a passport and valid visa.
• International e-commerce transactions: Platforms like Google Pay’s UPI International feature enable cross-border purchases from global merchants.

Currently, UPI is accepted in seven countries, including the UAE, Singapore, Bhutan, Nepal, Maldives, Mauritius, France, and Sri Lanka, with further expansion on the horizon.

The future of UPI in cross-border payments

As India strengthens its position in the global payments’ ecosystem, UPI is set to play a crucial role in modernising cross-border transactions. The outlook includes:

• Expansion of UPI International: More countries are expected to adopt UPI-based payment frameworks, especially in emerging markets where digital payment infrastructure is still evolving.
• Seamless remittance solutions: UPI’s ability to facilitate instant, low-cost cross-border remittances will benefit millions of Indian workers abroad.
• Increased global acceptance of Rupee transactions: With regulatory support, the Rupee’s presence in international trade settlements will expand, reducing dependency on dominant global currencies.

Conclusion

UPI has already transformed India’s domestic payments landscape, and its growing role in cross-border transactions marks the next frontier. By leveraging regulatory reforms, technological innovations, and strategic partnerships, India is poised to enhance the efficiency and affordability of global payments. As more countries integrate with UPI, the vision of a seamless, interoperable, and cost-effective global payment system becomes increasingly tangible. The payments industry must recognise and adapt to this paradigm shift, ensuring that the future of cross-border transactions is faster, more inclusive, and digitally driven.