International Use of India’s Digital Payment Systems, UPI

India’s digital payment systems like the Unified Payments Interface (UPI) is steadily becoming globally attractive amid measures to enable seamless cross-border transactions. This is lowering cost of fund transfers and remittance payments. For example, residents in Singapore and India will now be able to transfer money instantly to each other via UPI and PayNow as the peer-to-peer payment systems have become linked.

Among other recent announcements, the UPI payments facility will soon be extended to inbound foreign travelers from G20 countries for making merchant payments. Further, non-resident Indians (NRIs) in selected international countries would also be allowed to conduct transactions on UPI platforms without requiring an Indian mobile number. 

Indian digital payment systems are available in Singapore, UAE, Oman, Saudi Arabia, Malaysia, France, BENELUX markets – Belgium, the Netherlands and Luxembourg – and Switzerland, among others. It is also understood that India has signed MoUs with 13 countries that want to adopt the UPI interface for digital payments.

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India has been making significant strides in expanding the network of its digital payment systems like RuPay, UPI (Unified Payments Interface), etc. globally, with Europe being among the latest regions to accept India’s payment systems. Other countries that have embraced different forms of Indian payment systems include France, UAE, Saudi Arabia, Bahrain, Singapore, Maldives, Bhutan, and Oman. This implies that Indians will now be able to make payments through UPI, RuPay etc. in these countries.

Speaking on the sidelines of the G20 digital economy working group meeting in Lucknow, Union Minister Ashwini Vaishnaw said [February 13, 2023] that India had signed memoranda of understanding (MoUs) with 13 countries that want to adopt the UPI interface for digital payments, and that Singapore has completed its UPI integration.

These global partnerships have come through as the NIPL (NPCI International Payments Limited) is forging partnerships with different countries to build a huge acceptance network for RuPay and UPI, which will allow Indian travelers to make payments via these channels in their destination country of travel.

NIPL was incorporated in April 2020 as a wholly owned subsidiary of the National Payments Corporation of India (NPCI), devoted for deployment of RuPay and UPI outside of India.

Also, and in keeping with its ambitions to expand the digital economy, India has announced UPI access for NRIs in 10 foreign countries whose Indian bank accounts are linked to foreign mobile numbers as well as foreign travelers coming to India – at select international airports to begin with.

Global adoption of UPI: Partners reaching agreement with NIPL

Announcement	Entity partnering with UPI network	Countries
July 2021	Royal Monetary Authority of Bhutan	Bhutan
September 2021	Monetary Authority of Singapore, PayNow	Singapore
August 2021	Merchantrade Asia	Malaysia
September 2021	Liquid Group	Singapore, Malaysia, Thailand, Philippines, Vietnam, Cambodia, Hong Kong, Taiwan, South Korea, Japan
November 2021	Network International (NI)	UAE
February 2022	Gateway Payment Services, Manam Infotech	Nepal
April-August 2022	LuLu Financial, NEOPAY (Mashreq Bank)	UAE
June 2022	Lyra	France
August-September 2022	Terrapay, PayXpert	United Kingdom
October 2022	Worldline	Netherlands, Belgium, Luxemburg, Switzerland
October 2022	Central Bank of Oman	Oman

How Singapore and Indian residents can transact via UPI 

Starting February 21, people living in Singapore and India can instantly transfer money to each other via UPI and PayNow, each other’s equivalent. According to reporting from the Hindustan Times, “the cross-border real-time payment systems linkage was launched at 11am on Monday [February 20] led by Reserve Bank of India (RBI) governor Shaktikanta Das, and Ravi Menon, managing director of the Monetary Authority of Singapore [MAS]. Prime Minister Narendra Modi and Singapore Prime Minister Lee Hsien Loong virtually attended the launch event.”

Residents in India can now transact with people in Singapore via payment apps linked to a mobile phone number that use the UPI interface, like Google Pay.

Inbound foreign travelers from G20 countries can use UPI payments facility

On February 8, 2023, the Reserve Bank of India proposed to permit India-bound foreign travelers to use UPI for retail payments (peer-to-merchant or P2M transactions).

Initially, this UPI facility will be permitted to travelers from G20 countries arriving at select international airports. The Group of Twenty (G20) comprises 19 countries – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, and United States and the European Union.

The central bank also clarified: “Going forward, this facility will be enabled across all other entry points in the country. Necessary operational instructions will be issued shortly.” See the RBI notification, Statement on Developmental and Regulatory Policies, dated February 8, 2023 here.

Acceptance of India’s UPI in overseas markets

Nepal

Nepal became the first foreign country to deploy UPI as a payment platform. NIPL partnered Gateway Payments Service (GPS), an authorised payment system operator in Nepal, and Bengaluru-based Manam Infotech. UPI will be deployed in Nepal as a digital public benefit to bolster interoperable real-time person-to-person (P2P) and to-merchant (P2M) payment transactions.

Bahrain

Bahrain has expressed interest in having in place a payment integration system like the Indian UPI and Singaporean PayNow linkage. Initial discussions have taken place; fintech is a clear priority for the small Gulf kingdom.

Bhutan

Bhutan has become the first country to adopt India’s UPI standards for its quick response (QR) code. It is also the second country after Singapore to have BHIM-UPI acceptance at merchant locations. On July 13, 2021, UPI was made available to the Royal Monetary Authority of Bhutan. BHIM (Bharat Interface for Money) is India’s digital payment application that works through UPI, a system that powers multiple bank accounts into a single mobile application.

Europe

NIPL has entered into a partnership with European payment services facilitator Worldline, with the intention of expanding acceptance of Indian payment channels across Europe. Under the partnership, Worldline’s QR code-based mechanism will allow merchants’ Point-of-Sale (PoS) systems in Europe to accept UPI payments from Indians using their mobile phones.

At a later stage, the Indian customers will also be able to use their RuPay debit or credit cards to make payments in Europe.

Apart from enabling Indians to travel hassle-free and enjoy seamless payments infrastructure, this step will also augment the customer-related benefits available to European merchants due to an increase in footfall and spending from Indian tourists.

In it’s press release, NIPL stated that it will target markets such as BENELUX – Belgium, the Netherlands and Luxembourg – and Switzerland. It will expand further with the roll-out of Worldline QR in more European countries.

UK

To further strengthen its cross-border payment solutions, TerraPay, a leading global payments infrastructure group announced its partnership with NIPL on September 22, 2022. This partnership intends to enable Indian customers and merchants in India with an active UPI ID to make and accept cross-border payments seamlessly by leveraging TerraPay’s agile infrastructure and the UPI network.

Oman

The Memorandum of Understanding (MoU) signed between Central Bank of Oman (CBO) and NIPL in October 2022 will enable Indian RuPay cards and the UPI platform in Oman to facilitate seamless digital remittances, which will benefit Indian workers and professionals.

According to the Indian Embassy in Oman, there are about 624,000 Indians in Oman, of which about 483,901 are workers and professionals as of May 2021.

France

France-based payment services provider Lyra Network signed an agreement with the NIPL, allowing students and tourists to make payments through UPI.

UAE

NIPL has partnered with LuLu Financial Holding, Mashreq Bank, and Network International in UAE to enable UPI payments. On April 21, 2022, UPI was launched in the country through Mashreq’s NeoPay.

Singapore

In July 2022, the Reserve Bank of India (RBI) signed an agreement with the Monetary Authority of Singapore to implement interoperability between UPI and PayNow. The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.

PayNow is the fast payment system of Singapore, which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in the country. It enables users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore NRIC/FIN, or VPA.

Malaysia

In 2021, Malaysia’s Merchantrade Asia, collaborated with NIPL, to allow sending remittances through UPI to India.

NRE or NRO accountholders with international mobile numbers allowed to register and transact on UPI platforms

As per a January 10, 2023 circular from the NPCI, UPI platforms will be able to onboard non-resident accountholders (NRE/NRO accounts) from 10 countries with international mobile numbers if they satisfy certain conditions. NRIs use NRE accounts to transfer foreign earnings to India, while NRO accounts helps them manage their income earned in India.

Their banks must ensure the NRE/NRO accounts meet Foreign Exchange Management Act (FEMA) regulations and guidelines released from time to time by the Reserve Bank of India (RBI) besides guarding against money laundering or terror financing.

This means that NRIs seeking to transact via UPI platforms in these stipulated countries would not require an Indian mobile number. It will help international students, family living abroad, and local businesses.

Partner banks have till April 30, 2023 to comply with the NPCI directions.

List of 10 countries where NPCI will enable international mobile number-linked UPI transactions

Country	Country code
Singapore	+65
Australia	+61
Canada	+1
Hong Kong	+852
Oman	+968
Qatar	+974
USA	+1
Saudi Arabia	+966
UAE	+971
United Kingdom	+44

India’s digital payment systems: UPI accounts for major chunk of transactions

Meanwhile, the UPI’s popularity in India has been expanding ever since its launch in 2016. As per a recent report by Worldline titled ‘India Digital Payments Report’, India saw 20.57 billion online transactions worth INR 36.08 trillion in the second quarter of financial year (FY) 2022. The country’s online transactions were processed through debit and credit cards, prepaid payment instruments like mobile wallets and prepaid cards, and UPI which includes P2M (person to merchant) and P2P (person to person) transactions.

The report stated that UPI P2P accounted for 49 percent in volume and 67 percent in value but in terms of merchants’ transactions, UPI P2M emerged as the preferred payment mode with a market share of 34 percent in volume and 17 per cent in terms of value.

End of 2022 update

According to NPCI data, approximately 74 billion UPI transactions worth INR 125.94 trillion were conducted in the calendar year 2022. In 2021, the UPI platform handled more than 38 billion transactions amounting to INR 71.54 trillion in 2021. This shows a nearly 90 percent growth in transactions on the platform in one year; the average value has increased by 76 percent. A record 7.82 billion UPI transactions took place in December 2022, totaling INR 12.82 trillion.

This article was originally published October 12, 2022. It was last updated February 21, 2023.