Assumption 1: It Works Everywhere
The biggest mistake travellers make is assuming UPI is universally accepted. While the network is expanding rapidly, its availability is limited to countries where NPCI International has forged specific partnerships. As of mid-2026, UPI is operational
in countries like Singapore, the UAE, France, Nepal, Bhutan, Mauritius, Sri Lanka, Qatar, and most recently, Cambodia. However, “operational” doesn’t mean every single shop will accept it. Acceptance is often concentrated in tourist-heavy areas, major retail outlets, and specific merchants that have enabled the service. For instance, while you can use UPI to buy a ticket for the Eiffel Tower in France, the small bakery down the street may not have the facility. Bhutan and Singapore are often cited as having the most mature and widespread acceptance, whereas other regions are still catching up. Always have a backup payment method, like a forex card or credit card.
Assumption 2: Transactions Are Free
In India, we are used to UPI transactions being free. This is not the case for international payments. While your UPI app itself—like Google Pay or PhonePe—won't typically charge a separate fee, the transaction is treated as an international remittance by your bank. This means two costs come into play. First, your bank will levy a foreign exchange markup fee. This is a percentage added to the wholesale currency exchange rate, which is how the bank profits from the conversion. This markup is generally lower than the 3.5% to 4.5% charged by many credit cards, often ranging from nearly zero to 0.4%, but it's not zero. Second, there may be transaction fees or taxes like GST applied by the bank or government on the service. Before you travel, it is crucial to check with your bank to understand its specific charges for international UPI payments.
Assumption 3: The Exchange Rate Is What You See on Google
When you pay abroad, you’ll often be presented with two options: pay in the local currency (like Euros or Dirhams) or pay in Indian Rupees (INR). Choosing to pay in INR might seem easier, as you know the exact cost instantly. However, this is a mechanism called Dynamic Currency Conversion (DCC), and it often comes with an unfavourable exchange rate set by the merchant's bank, which can be significantly higher than the market rate. To avoid this potential trap, always choose to pay in the local currency. Your own bank will then handle the conversion at a typically more competitive rate. Recent partnerships between NPCI and major financial institutions like HSBC and J.P. Morgan are aimed at providing more transparent, real-time FX rates for UPI transactions, which should help make costs clearer for users before they approve a payment.
Assumption 4: It’s Just 'Scan and Pay'
Using UPI abroad isn’t always as simple as opening your app and scanning. First, you must activate international payments within your UPI app before you leave India. This is a crucial security step that many travellers forget. Second, your ability to pay depends on a stable internet connection, which can be a challenge with patchy international roaming or unreliable public Wi-Fi. Ensure your Indian SIM card has an active international roaming plan, as some apps may require OTP verification. Finally, transaction failures can happen. If a payment fails but the amount is debited, don't panic. Note the transaction reference number and check the status in your app. Most such issues are auto-reversed within 48 hours, but resolving disputes can take longer than domestic ones due to the multiple international partners involved.
