RBI’s new vision enables UPI to expand its international reach, facilitating cross-border transactions and seamless payments for Indian travelers, businesses, and the diaspora.
By J P GUPTA
New Delhi: Paytm’s parent firm, One97 Communications Limited (OCL), has introduced a service that allows customers to make Unified Payments Interface (UPI) payments in select global locations. This is a crucial step toward expanding UPI beyond India, in line with the Reserve Bank of India’s objective to increase the system’s worldwide reach.
Indian travelers can now use Paytm’s UPI service for cashless transactions at destinations where UPI is accepted, including popular international locations such as the United Arab Emirates, Singapore, France, Mauritius, Bhutan, and Nepal.
The new feature on the Paytm app enables users to activate UPI payments for a specific duration, ranging from 1 to 90 days, tailored to their travel schedule. This ensures that users can avoid accidental payments once they return to India, offering full control over their transactions.
Furthermore, the app displays real-time foreign exchange rates and conversion fees during transactions, ensuring complete transparency and helping users manage costs effectively.
With this expansion, Paytm is helping to streamline international payments for Indian travelers, making it easier and safer to shop and pay abroad, while promoting UPI’s adoption on a global scale.
RBI Aims to Expand UPI to 20 Countries by 2028-29
In its annual report for 2023-24, the Reserve Bank of India (RBI) unveiled its ambitious plan to expand the reach of India’s Unified Payments Interface (UPI) to 20 countries by 2028-29.
This strategic move, aimed at enhancing India’s global financial footprint, is being executed in collaboration with NPCI International Payments Ltd. (NIPL), a subsidiary of the National Payments Corporation of India (NPCI), which is responsible for overseeing UPI’s global expansion efforts.
The UPI system, which has revolutionized the digital payments landscape in India, is now set to make its mark internationally. In just a few years, UPI has become a dominant form of payment within India, enabling users to transfer money seamlessly between bank accounts using their mobile phones.
With over 8 billion transactions processed monthly as of 2024, UPI has proven to be a robust and efficient payment solution, offering features like instant peer-to-peer transfers, bill payments, and even merchant transactions.
Now, with the RBI’s new vision, UPI is poised to extend its reach to several international markets, opening up new opportunities for cross-border transactions and facilitating seamless payments for Indian travelers, businesses, and the diaspora.
The move is expected to boost economic and financial ties between India and the target countries. It will also help promote UPI as a secure, cost-effective alternative to traditional payment methods used globally, such as credit cards and international remittance services.
To facilitate this global expansion, the RBI is working closely with NPCI International Payments Ltd. (NIPL), which was established in 2020 to oversee and promote the internationalization of Indian payment systems.
NIPL’s role is pivotal in forging partnerships with financial institutions, regulators, and payment networks in other countries to integrate UPI with local systems. NIPL has already made significant strides, having signed agreements with several countries, including Singapore, Bhutan, UAE, and Nepal, where UPI is already operational or is set to launch soon.
The vision outlined by RBI also aligns with the Indian government’s broader agenda to enhance India’s digital payment ecosystem and position the country as a leader in the global fintech space.
As part of this vision, NIPL will explore new markets in Southeast Asia, the Middle East, Africa, and Europe, aiming to introduce UPI as a preferred method for cross-border payments.
One of the immediate benefits of UPI’s global expansion is for Indian travelers. As UPI starts to roll out in more countries, Indian citizens traveling abroad will be able to make cashless payments, seamlessly paying for services, goods, and even remittances using the UPI platform.
The launch of Paytm’s international UPI payments feature, which allows Indian travelers to pay with UPI in countries like the UAE, Singapore, and France, is just the beginning of what promises to be a far-reaching global network.
For Indian businesses operating internationally, UPI’s expansion will also create new avenues for cross-border commerce. The ability to facilitate instant and low-cost payments with partners, suppliers, and clients in other countries will reduce dependency on expensive and slower international wire transfers.
Additionally, it will streamline operations for Indian companies with a presence abroad, further embedding India’s digital payment systems in the global economy.
While the vision is ambitious, there are several challenges to address in the global rollout of UPI. One key hurdle is regulatory alignment between India and the target countries. Each country has its own set of regulations governing digital payments, and UPI’s integration with local systems will require cooperation from foreign regulators and financial institutions.
Furthermore, addressing cybersecurity and fraud concerns will be critical in building trust among users in different countries, especially in regions with differing levels of digital payment infrastructure.
Moreover, competition from established global players like Visa, Mastercard, and emerging payment systems such as China’s UnionPay will also require UPI to differentiate itself. Offering faster, cheaper, and more transparent transactions will be essential to its success in foreign markets.
By 2028-29, the RBI’s target of 20 countries adopting UPI could transform the global payments landscape. India’s growing influence in the digital payments sphere is set to expand its role in global finance, offering a modern, efficient alternative to existing global payment systems.
As UPI continues to gain traction internationally, it has the potential to foster greater financial inclusion and connectivity across borders, especially in emerging markets, while simultaneously making life easier for Indian citizens and businesses abroad.
In conclusion, the RBI’s push to expand UPI globally, in partnership with NIPL, marks a major milestone in India’s fintech journey. With a clear roadmap and a growing number of international collaborations, UPI is poised to become a leading player in the global digital payments ecosystem, changing the way the world conducts transactions and making India a key player in the global payments industry.
