The Promise of a Global Footprint
The international expansion of UPI is a cornerstone of India's ambition to export its world-class digital public infrastructure. The goal is twofold: provide seamless payment convenience for Indian tourists and the diaspora, and establish UPI as a global
standard, an alternative to dominant Western payment networks. With partnerships announced in countries from France to Singapore and, most recently, Greece, the vision is powerful. Headlines celebrate every new memorandum of understanding (MoU) as a diplomatic and technological victory, showcasing India's fintech prowess on the world stage. This push, part of the RBI's 'Payments Vision 2025', aims to create low-cost corridors for remittances and trade, deepening economic ties.
The Reality: A Tourist-Focused Convenience
Herein lies the first reality check. The vast majority of UPI's international agreements are designed for one primary user: the Indian traveller. When you use UPI in the UAE, France, or Sri Lanka, you are not using a system adopted by locals for their daily transactions. Instead, you are using a service that allows you, an Indian tourist, to pay select merchants from your Indian bank account. While undeniably convenient—eliminating the need for currency exchange for small purchases—it is not true globalisation. The system is a cross-border payment facility for Indians, not a replacement for local payment ecosystems. In most partner countries, UPI is only available at specific, often tourist-heavy, locations like the Eiffel Tower in Paris or major retail outlets in Dubai.
The Challenge of Deep Integration
For UPI to become truly global, it must move beyond serving tourists. It needs to be adopted by local populations and integrated into their domestic banking systems. This is where the challenge intensifies. Every country has its own entrenched payment systems, from card networks like Visa and Mastercard in Europe to powerful local real-time payment systems in Asia. The process of achieving deep interoperability—where a local in another country could use their bank app to pay via UPI—is slow and complex. It involves navigating a maze of differing regulations, from data localisation and anti-money laundering laws to consumer protection standards. The current model of bilateral agreements, while effective for quick wins, is inefficient for scaling a truly global network.
What is the Business Model?
A more fundamental question is the commercial viability. UPI's success in India was built on a foundation of zero-cost transactions for users, a model that is difficult to sustain abroad without government backing. For foreign banks and merchants to invest in integrating and promoting UPI, there must be a clear business incentive. They will weigh transaction fees, settlement reliability, and integration costs against the benefits of catering to Indian tourists. While new partnerships with global banks like HSBC and J.P. Morgan aim to streamline foreign exchange and settlement, the core issue remains: UPI must compete with established players that have well-defined, profitable business models.
A More Sober Perspective
None of this is to diminish the remarkable success of UPI. Its international expansion is a significant strategic achievement, serving as a powerful tool of soft power and providing real convenience to millions of travelling Indians. The UPI-PayNow link with Singapore, which facilitates direct remittances, is a prime example of a successful, targeted corridor. However, we must be clear about what is being achieved. The current stage of UPI's global journey is about extending a domestic service for its citizens abroad. It is not yet about conquering foreign markets or displacing global incumbents. The slow uptake even in a close neighbour like Nepal highlights the practical hurdles of infrastructure gaps and digital literacy that must be overcome.
