Unified Payments Interface, commonly referred to as UPI, is an Indian instant payment system as well as protocol developed by the National Payments Corporation of India (NPCI) in 2016. The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions.[1][2] It is used on mobile devices to instantly transfer funds between two bank accounts. The mobile number of the device is required to be registered with the bank. The UPI ID of the recipient can be used to transfer money. It runs as an open source application programming interface (API) on top of the Immediate Payment Service (IMPS),[3][4][5][6] and is regulated by the Reserve Bank of India (RBI). Indian Banks started making their UPI-enabled apps available on Google Play on 25 August 2016.
With UPI, India maintains its position as the global leader in instant payments, accounting for 46% of all global instant payment transactions in 2022.[7][8] As of November 2022, the platform had over 300 million monthly active users in India.[9][10] The proportion of UPI transactions in total volume of digital transactions grew from 23% in 2018–19 to 55% in 2020–21 with an average value of ₹1,849 per transaction.[11] It enabled over 2,348 transactions every second in 2022.[12]
According to data from the NPCI, 12.20 billion UPI transactions worth ₹18.41 lakh crore (equivalent to $222.17 billion) were processed in January 2024, representing a 41.72% increase in transaction value compared to January 2023.[13] In 2023, the total annual value of UPI transactions in India reached ₹182 lakh crore (equivalent to $2.2 trillion), reflecting a 59% increase in transaction volume and 45% increase in transaction value compared to 2022.[14] The success of UPI made it a soft power tool for India.[15] It became one of the most successful deep-tech financial innovations India has produced.[16][17]
History[edit]
In April 2009, the National Payment Corporation of India (NPCI) was formed to integrate all the payment mechanisms in India and make them uniform for all retail payments. By March 2011, RBI found out that in India, only six non-cash transactions were executed each year by individual citizens while 10 million retailers accepted card-based payments. Around 145 million families had no access to any form of banking. There was also the problem of tackling black money and corruption that happened mostly in cash.[16]
RBI in 2014 released a vision statement for a period of four years that indicated commitment towards building a safe, efficient, accessible, inclusive, interoperable, and authorized payment and settlement system in India. It was also part of the Green Initiative to decrease the usage of paper in the domestic payments market.[18] UPI was officially launched in 2016 for public use.[19]
Under RBI guidance, NPCI became the primary body tasked with developing a new payment system that is simple, secure, and interoperable. UPI works on a four-pillar push-pull interoperable model where there will be a remitter/beneficiary front-end PSP (payment service provider) and a remitter/beneficiary back-end bank that settles the monetary transaction for the users. According to the CEO of Netmagic Solutions, UPI became one of the most successful deep-tech financial innovations India has produced.[16][17]
In December 2019, noting the success of UPI, Google suggested that the US Federal Reserve Board should follow UPI as an example in developing FedNow,[20] a real-time payment system for the United States.[21]
With the exponential growth of UPI, India became the world’s largest real-time payment market with 25.5 billion annual transactions in 2020 per data from ACI Worldwide and GlobalData. This put the country ahead of China, South Korea, Thailand and the United Kingdom.[22]
As per the Economist Intelligence Unit Report 2021, UPI has made India a leader in the global real-time payment market followed by China and South Korea.[23] After the decision of the Ministry of Finance to nullify the merchant discount rate (MDR) in 2019 from UPI, the number of low value transactions skyrocketed, making huge gains on real-time transaction volume data.[24][25] Countries such as Brazil, Bahrain, Saudi Arabia, Singapore, the United States, and the European Union are exploring options to implement a UPI-like system in their own domestic markets.[25][26]
From 1 January 2019, UPI became a popular payment option for initial public offerings (IPOs). The transaction limit was enhanced from ₹100,000 to ₹200,000 in March 2020. From December 2021, RBI again increased the limit to ₹500,000 for Retail Direct Scheme and IPO applications.[27] To make UPI economically feasible for payment companies, RBI is considering a merchant discount rate (MDR) on future UPI transactions.[28] In its first monetary policy for the 2022-23 financial year, RBI proposed a cardless cash withdrawal facility from ATMs using UPI-based QR codes.[29] In partnership with the NSDL Payments Bank and NPCI, ToneTag launched VoiceSE which will enable 400 million feature phone users to make UPI payments using voice in Hindi, Telugu, Tamil, Malayalam, Kannada, and Bengali languages.[30] According to Redseer Strategy Consultants, in 2023, UPI usage has expanded outside of metro areas. Currently, around 70% of UPI users are from places other than Tier-1 cities. Furthermore, over 80% of newly registered users originate from Tier-2 cities and other nearby areas.[31]
UPI 2.0[edit]
On 16 August 2018, UPI 2.0 was launched, which enabled users to link their overdraft accounts to a UPI handle. Users were also able to pre-authorise transactions by issuing a mandate for a specific merchant. This version also included a feature to view and store an invoice for each transaction. An AutoPay facility for recurring payments was also added.[32][33][34] As of August 2021, State Bank of India, Bank of Baroda and Paytm Payments Bank have been live on UPI AutoPay, each registering 660,000, 204,000, and 186,000 mandates, respectively.[35] From 15 March 2022, the government removed the need for debit cards for UPI registration.[36] NPCI is planning to expand AutoPay to international markets and operationalize real-time payment dispute resolution mechanisms covering 90% of the complaints by September 2022.[37]
From 8 June 2022, RBI allowed linking RuPay credit cards with UPI. Customers can now make credit card payments using UPI, in the absence of a physical card.[38] NPCI developed a real-time feature that will reduce the 24-hour time period taken by banks to unblock funds over time-out or transaction declines to 30 seconds.[39] The service was officially launched on 20 September 2022.[40] On 7 December 2022, RBI announced that UPI will upgrade from single-block-single to single-block-multiple debit for recurring transactions and investments in securities. This feature is expected to help users block funds for specific purposes and release them when needed.[41]
RBI on 6 April 2023 proposed allowing credit on UPI through pre-approved bank lines which would help customers reduce their dependence on credit cards.[42][43] On its point-of-sale devices, Razorpay introduced a quick refund feature for UPI in 2024. Compared to the industry average of five to six business days, the reimbursement will be initiated within 2 minutes.[44]
After introducing the first card-less UPI automated teller machine (ATM), Hitachi Payment Services is now working on creating a UPI-based cash recycler machine (CRM). It will operate on UPI ATMs’ opposite principle. The Reserve Bank of India and the National Payments Corporation of India are collaborating with the company to explore the feasibility of permitting deposits based on UPI.[45][46]
International mobile numbers of ICICI Bank‘s non-resident Indian clients can be used to make UPI payments in India. In ten nations—the United States, United Kingdom, United Arab Emirates, Canada, Singapore, Australia, Hong Kong, Oman, Qatar, and Saudi Arabia—the bank provides this service.[47]
UPI 123PAY[edit]
As part of a financial inclusion initiative, NPCI with fintech start-up Naffa Innovations with their product ToneTag in 2021 started working on developing a voice-based payment service for feature phone users in low connectivity zones over UPI payment ecosystem under Interactive Voice Response (IVR) project. The system utilised Dual Tone Multi-Frequency (DTMF) signalling technology with two-factor authentication (2FA) flow for peer-to-peer (P2P) transaction. From September 2020 to June 2021, it was under beta testing while awaiting RBI approval for large-scale deployment.[48] The beta testing and pilot experiment were completed by October 2021 and RBI started formulating guidelines for nationwide use.[49]
The RBI governor Shaktikanta Das launched the service called UPI 123PAY on 8 March 2022, with an aim to help almost 400 million feature phone users in the country.[50] Till now, UPI payments were only possible through payment applications on smartphones and USSD-based service for feature phones. However, as per Deputy Governor T Rabi Shankar, the latter has been found to be cumbersome due to the unavailability of the services on several mobile networks.[51]
UPI 123PAY has four options for payment.[52]
- App-based functionality where a mobile phone manufacturer can install a UPI app through over-the-air programming, that can be used for payment.
- Missed calls based: where a customer can use a dedicated merchant payment number by giving a missed call. The incoming authentication call will ask for PIN verification to complete the transaction.
- Interactive Voice Response (IVR) based where the payment transaction will be completed using pre-defined phone numbers.
- Payment in offline mode through sound-based proximity data communication.
As per NPCI, some of the early use cases involve FASTag recharges, insurance payments, and EMI collections. As of 20 September 2022, Ultracash Technologies in collaboration with Bharat Petroleum helped 200,000 active users make LPG booking and payment through UPI 123PAY.[53]
Service[edit]
For real-time payments from one bank account to another, any UPI client app can be used and multiple bank accounts can be linked to a single app. Money can be sent or requested using a user-created Virtual Payment Address (VPA) or UPI ID for each bank account using the KYC-linked mobile number. UPI also generates a specific QR code for each user account for contactless payments. The RBI increased the UPI payment limit for payments in hospitals and educational institutions from ₹100,000 to ₹500,000 on 8 December 2023. Multi-factor authentication for UPI e-mandates will now be activated over ₹100,000, as opposed to ₹15,000, for credit card repayments, mutual fund subscriptions, and insurance premium payments.[54]
Mobile apps[edit]
Any UPI app can be used to transfer funds from and to UPI enabled banks. Apart from various third-party apps such as Google Pay (previously Tez), PhonePe, Paytm, Amazon Pay, Airtel Payments Bank, MobiKwik, Samsung Pay, WhatsApp Pay,[55] NPCI manages its own app, BHIM.[56]
The total number of banks linked to UPI platform grew from 21 in April 2016 to 304 in February 2022.[57]
In June 2021, NPCI removed the restriction placed on WhatsApp for UPI customer onboarding which until then was limited to 20 million users. With 530 million registered users in the Indian market, WhatsApp could then roll out UPI to all its customers.[58]
On-Device wallet[edit]
NPCI called this feature UPI Lite. It can scan QR code without the need of an internet connection. In phase 1, UPI Lite will process the debit transaction offline while the credit will happen when the device goes online. But the final goal is to achieve both credit and debit transaction through offline mode. The upper limit of UPI Lite On-Device wallet is ₹2,000. Additional factor authentication or UPI AutoPay feature will be used to securely load the desirable amount.[59] Since 50% of UPI transactions are below ₹200 with a higher frequency rate, the per transaction limit will be maximum ₹200, as it creates a large backlog of volume which increases the failure rate and affects the stability of the entire payment network. To save electricity consumption and computing power of banks, UPI mobile apps will have to support on-device wallet features as per the RBI directive from December 2021. The in-built wallet will help in low-value instant payment by using the infrastructure of the mobile app developer, thus decreasing the load on banks through decentralization of back-end infrastructure and resources.[27]
On 20 September, RBI governor Shaktikanta Das officially launched UPI Lite at Global Fintech Fest 2022. Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India and Utkarsh Small Finance Bank enabled UPI Lite feature on BHIM.[40] Paytm Payments Bank on 15 February 2023 went live with UPI Lite feature.[60]
Supported banks[edit]
The NPCI website lists the banks that facilitate UPI,[61] termed as Payment Service Providers (PSP) – listed with their UPI application and handle – and issuers.[61] PSP includes banks which have their own mobile application to facilitate transaction and issuers include banks which don’t have their own payments interface and rely on third-party software for transactions.
e-RUPI[edit]
e-RUPI or e₹UPI (portmanteau of electronic Rupee and UPI)[62][63] developed in collaboration with Department of Financial Services, Ministry of Health and Family Welfare and National Health Authority. It was introduced from 2 August 2021. e-RUPI is to ensure leak proof delivery of welfare services and bypassing middle man to decrease corruption. Private sector can use the service for their own corporate social responsibility initiative (CSR). e-RUPI is basically e-voucher based on QR code or SMS string that can be delivered through mobile phone.[64] e-RUPI will act as a precursor for future Central bank digital currency (CBDC) that will be launched by RBI as it will help in highlighting the gaps within the national digital payment infrastructure.[65][66]
Financial Software and Systems (FSS) integrated e-RUPI on 1 December 2021 for financially underserved segments of the society.[67] Government of Karnataka partnered with NPCI to provide student scholarship through e-RUPI which can even be received on feature phones.[68]
Digital Rupee[edit]
Main article: Digital rupee
As part of the Central Bank Digital Currency pilot project, Canara Bank has released the Unified Payments Interface compatible digital rupee mobile app. Without the need for a separate on-boarding procedure for CBDC for retailers, it will enable users to scan the existing UPI QR code and make payments using digital rupee. Customers in 26 Indian cities who have been whitelisted can access the service as part of a pilot program.[69]
Market share[edit]
From 93,000 transactions in August 2016 valued at ₹30 million, UPI generated 800 million transactions in March 2019 with a total value of ₹1330 billion.[17] In June 2021, UPI recorded 1.94 million IPO mandates that increased to 7.66 million in July.[70] This was the highest ever since UPI was made mandatory by Securities and Exchange Board of India for domestic retail investors for IPO process.[71][72] By late August 2020, with 18 billion annual transactions, UPI surpassed American Express in India. NITI Aayog predicted that UPI will also surpass Visa and Mastercard by 2023.[73] UPI took three years to reach 1.14 billion in October 2019 while by the end of October 2020, the payment system registered 2.07 billion transactions.[19] In 2020, $457 billion worth of value was moved on UPI platform which was 15% of India’s GDP.[74]
As of July 2021, UPI registered 432.5 million transactions that accounted for ₹567,345 million with highest average daily transaction of approximately 100 million that is double the amount from July 2020.[75][76] As of August 2021, UPI forms 10% of all retail payment in India.[77] PhonePe and Google Pay both recorded 1 billion transactions in August with a market share of 45.94% and 34.45% respectively in the UPI payment ecosystem while Paytm took 11.94% share with ₹387.85 million transaction.[78]
From the financial year 2015–21, the domestic retail payment by value on UPI grew at 18% at a compound annual growth rate (CAGR) while between 2017 and 2021, the collective payment on all forms of UPI grew at 400% CAGR. In the financial year 2021, ₹41 trillion (short scale) worth of money was exchanged on the UPI platform that is 2.8 times the value of debit and credit card payment at point of sale (POS) terminals and 20 times the value of digital wallet and prepaid instruments in India.[77]
UPI registered 3.55 billion transactions in August 2021, a growth of 9.56% from the previous month. In terms of value, ₹6.39 trillion worth of money was transacted in August alone. From ₹3.2 trillion to ₹6 trillion, the growth in value terms doubled between September 2020 to July 2021.[79] It had reached an all-time high of 3.65 billion transactions worth ₹6.54 trillion in value since inception in the month of September. By now the total transaction for the year 2021, reached ₹50 trillion.[80]
UPI touched value of ₹7.71 trillion in October 2021 which is a 56% jump from September. As per NPCI, daily UPI payment for the month of October is between ₹250 billion to ₹300 billion.[81] Out of all UPI transactions done in the month of October, 54% are Person-to-Person (P2P) while 46% were Person-to-Merchant (P2M).[82] UPI reached $844 billion in value until November 2021.[83] In December, the total transaction value on UPI reached ₹8.27 trillion with 99% annual growth rate. The largest share in $2 trillion of annual digital payment in India comes from UPI.[84] The Q2 of 2022 saw 20.57 billion transactions worth ₹36.08 trillion as per Worldline SA. P2P accounted for 49% in volume and 67% in value while P2M accounted for 34% in volume and 17% in value.[85] As per CEO Dilip Asbe of NPCI, P2M as of November 2022 accounts for more than 50% of UPI transaction volumes.[86] In 2019, UPI accounted for 17% of the ₹31 billion of digital transactions, and in 2022, accounted for 52% of the ₹88.4 billion of digital transactions.[87]
As per Minister of State for Finance Bhagwat Karad, in terms of volume, UPI increased at a CAGR of 147% from 92 crore in FY 2017–18 to 8,375 crore in FY 2022–2023. At a CAGR of 168%, the value of UPI transactions increased from ₹1 lakh crore in FY 2017–18 to ₹139 lakh crore in FY 2022–23. With UPI representing 62% of digital payment transactions in FY 2022–2023, it has been the primary driver of the overall development of digital payment transactions in India.[88]
In January 2024, the value of UPI transactions reached ₹18.41 trillion, a slight increase of 1% from ₹18.23 trillion in December 2023. From 12.02 billion in October 2023 to 12.20 billion in January 2024, there was a 1.5% increase in transactions. With 11.4 billion transactions, the value was recorded at ₹17.4 trillion in November 2023. In comparison to the same month in the previous fiscal year, January 2024 numbers were 52% higher in volume and 42% higher in value, according to NPCI data.[89] According to RBI governor Shaktikanta Das, in 2023 UPI would account for close to 80% of digital payments. Nearly 8 out of 10 digital payments are now done through UPI.[90]
| Year | No. of Payment Partners on UPI | Transaction volume (in mn) | INR value (in mn) | USD value (in bn) |
|---|---|---|---|---|
| 2024[91] | 581 | 58,039.67 | 86,822,867.8 | 1042.51 |
| 2023 | 522 | 117,675.97 | 182,844,068.2 | 2195.03 |
| 2022 | 382 | 74,044.48 | 125,948,187.3 | 1,699.71 |
| 2021 | 282 | 38,744.55 | 71,592,858.0 | 966.17 |
| 2020 | 207 | 18,880.89 | 33,877,447.2 | 457.19 |
| 2019 | 144 | 10,787.54 | 18,366,381.8 | 247.86 |
| 2018 | 129 | 3,746.32 | 5,857,104.5 | 79.04 |
| 2017 | 67 | 418.8 | 570,208.7 | 7.7 |
| 2016 | 35 | 2.65 | 8,930.7 | 0.12 |
~this data excludes the transactions having debit/credit to the same account for the month of August 2018 onwards
App market share[edit]
| Application | Transaction Volume (Mn) | Rank (Volume) | % Volume | Transaction Value (₹ Mn) | % Value | Rank (Value) |
|---|---|---|---|---|---|---|
| PhonePe | 6500.14 | 1 | 48.86% | 10016796.3 | 51.00% | 1 |
| Google Pay | 5027.32 | 2 | 37.79% | 6941896.8 | 35.34% | 2 |
| Paytm | 1117.13 | 3 | 8.40% | 1225542.5 | 6.24% | 3 |
| Cred | 138.46 | 4 | 1.04% | 432332.1 | 2.20% | 4 |
| Axis Bank Apps | 69.80 | 5 | 0.52% | 64832.4 | 0.33% | 8 |
| Amazon Pay | 64.33 | 6 | 0.48% | 67848.2 | 0.35% | 7 |
| ICICI Bank Apps | 47.41 | 7 | 0.36% | 266388.8 | 1.36% | 5 |
| FamApp | 46.64 | 8 | 0.35% | 5880.0 | 0.03% | 10 |
| Kotak Mahindra Bank Apps | 41.54 | 9 | 0.31% | 61018.8 | 0.31% | 9 |
| HDFC Bank Apps | 35.99 | 10 | 0.27% | 76897.6 | 0.39% | 6 |
| Others | 215.75 | – | 1.62% | 480980.0 | 2.45% | – |
| Total | 13304.51 | – | 100.00% | 19640413.5 | 100.00% | – |
Market cap[edit]
On 26 March 2021, NPCI defined standard operating procedure for third-party payment providers on 30% market cap. The limit will be calculated on the basis of total volume of transactions processed over UPI during the preceding three months on a rolling basis starting from 1 January 2021. Compliance deadline is until December 2023. NPCI will push first alert through an email or a letter to third-party payment providers and their partner banks when UPI transactions hits 25-27% threshold which payment providers must acknowledge. In return, payment providers will send second alert to NPCI with evidence on the steps taken for compliance. In case 30% mark is breached, payment providers and banks must stop new user on-boarding. In special cases, payment providers and banks may get an exemption of 6 months for compliance. The report of breaching 30% market cap must reach NPCI within first five working days with plan for corrective measures. During the same period, payment providers and banks must inform new customers about the issue. Non compliance of market cap bring penalties under UPI procedural guidelines. NPCI will check operating procedures of UPI every 6 months to meet objectives without creating inconvenience for end users.[93]
PhonePe made a formal request to NPCI to defer 30% market cap deadline from January 2023 to January 2026. NPCI is discussing this issue with RBI and Government. Industry stakeholders want to do away with 30% market cap proposed by NPCI, instead want organic growth based on customer demand. Implementation is another contentious issue since it results in blocking existing users from performing payment to maintain 30% market cap which is not feasible from business point of view. RBI also started looking for solutions to fix the duopoly situation created by Google Pay and PhonePe.[94] Both the players will get two additional years till 31 December 2024 to fix their market cap.[95]
Internationalization[edit]
Around 777 million Indian consumers shopped across the border in 2021. To make ease of payment, NPCI International Payments Limited (NIPL) signed memorandum of understanding (MoU) with UK-based PPRO Financial on 17 November 2021 to expand the acceptance of UPI into foreign markets, especially those in China and the United States which account for half of all international transaction coming from India.[96] On 26 January 2022, UK based fintech startup Transact365 enabled UPI for global merchants with real time currency conversion facility that will help them do business in India independent of local presence.[97] As per NPCI and RBI mandate, banks, payment service providers (PSPs) and third-party application providers (TPAPs) in India must enable international acceptance through UPI from 30 September 2022.[98]
With the release of the Payments Vision 2025 document on 17 June 2022, RBI will push for internationalization of UPI with nations using United States dollar, Pound sterling and Euro under bilateral treaties.[99][100] Ministry of External Affairs (MEA) also actively pushing for internationalization of UPI due to geopolitical concerns. But several countries including Canada are reluctant to accept UPI due to pushback from American firms. MEA is looking for Central Bank to Central Bank transfer using UPI as the pipeline and a collaborative effort if the countries have a similar system like UPI.[101] On 12 October 2022, India offered UPI and related technologies to Commonwealth of Nations.[102]
On 7 February 2023, PhonePe announced extending support of UPI for international payments in UAE, Singapore, Mauritius, Nepal, and Bhutan. Users will be able to pay in international currency directly from Indian bank accounts.[103] NIPL signed a definitive agreement with PPRO Financial on 27 April 2023 that will enable acceptance of UPI among international payment service providers (PSPs) and global merchant acquirers.[104]
On 18 July 2023, Universal Postal Union Director General Masahiko Metoki met with Union Minister Ashwini Vaishnaw from the Ministry of Communications. He consented to assess the integration of UPI for international money transfers via postal routes.[105] NPCI and RBI started active discussions with SWIFT for allowing international dollar transactions on UPI.[106] Google and NPCI signed MoU for UPI expansion abroad with the aim to make sure that Indian tourists visiting other countries have a smooth international transaction experience. It also seeks to use the UPI infrastructure to streamline international remittances.[107] The MoU also stated the intention of Google to develop UPI like system for foreign countries.[108]
Indian customers will be able to send money abroad using UPI thanks to WhatsApp’s upcoming introduction of international payment capabilities. It is anticipated that the functionality will go live for beta testers prior to an official release.[109] With an initial schedule of 2024–25 and a completion timeline of 2028–29, RBI and NIPL will endeavor to expand UPI to 20 nations in accordance with the objectives of Viksit Bharat 2047.[110]
UPI One World[edit]
RBI announced extending UPI payment facility for inbound travelers from G20 countries.[111] Transcorp International will enable UPI One World for nationals coming from G20 countries.[112]
UPI Wallet[edit]
UPI Wallet facility has been introduced for foreign tourists in India, Once set up, users can add funds using their preferred debit or credit card and start scanning to pay at over 20 million stores in India with no commission fee. The wallet’s wide acceptance means it is convenient for tourists to transact in any location, from roadside tea stalls to five-star resorts.[113] There are apps for UPI wallet such as Cheq UPI.
Remittance[edit]
Main article: Remittance
Due to increasing remittances to India, NIPL with Western Union is going to integrate UPI to help the Indian diaspora receive and send money abroad with ease.[114] The service will become operational from second quarter of 2022.[115] IndusInd Bank and Thailand based financial service provider DeeMoney will use UPI ID to verify customers in India for cross border transaction. This is part of the Money Transfer Operator (MTO) partners programme of NPCI.[116] IndusInd Bank is planning to collaborate with more foreign entities to increase acceptability of UPI abroad.[117] NIPL on 27 January 2022 signed MoU with Netherlands based Terra Payment Services that will help UPI users receive international payments from around the globe in real time.[118]
To save the cost borne by Indians living abroad when sending money back home, NPCI is planning to move 32 million expatriate population from SWIFT to UPI.[119] The 2022 Russian invasion of Ukraine and removal of Russian banks from SWIFT made development of an alternative all the more important for Indian policy makers.[120][121][122]
From 30 April 2023, international mobile numbers from Malaysia, Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, UAE, and the UK will be able to access the UPI transaction facility. It will be available through non-resident external (NRE) and non-resident ordinary (NRO) accounts.[123][124] Customers of Axis Bank, DBS Bank, ICICI Bank, Indian Bank, Indian Overseas Bank, and State Bank of India can now utilize the remittance facility between Singapore and India via the BHIM, Paytm, and PhonePe applications, according to a 11 January 2024, announcement from NPCI. Soon, more banks are anticipated to be connected, including HDFC Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Federal Bank, IDFC First Bank, IndusInd Bank, Karur Vysya Bank, Kotak Mahindra Bank, Punjab National Bank, South Indian Bank, and UCO Bank.[125]
NPCI International and Eurobank Ergasias signed MoU on 29 February 2024 to enhance cross border payments using UPI.[126]
Acceptance[edit]
Domestic[edit]
India[edit]
Talks with the United Arab Emirates and Singapore, both of which have sizeable Indian expatriate populations, have begun regarding the operation of UPI in those countries; this would also facilitate ease of payment for Indian tourists traveling there. A committee on digital payments led by Nandan Nilekani had suggested that NPCI should internationalise payment services like UPI, RuPay and BHIM.[127] NPCI is planning to link UPI with standalone mobile wallets so that users can transfer money from one provider to another one which until now is restricted due to use of closed source technology. There is also provision for off-line UPI payment through the use of near field communication (NFC).[128]
From 5 September 2019, Play Store enabled UPI for purchasing apps, games and in-app content.[129] On 20 April 2020, Google added support for UPI payment in India to buy membership of YouTube Premium and YouTube Music either directly through a website or on the mobile application. Now Indian users can also buy or rent movies from Google TV. UPI is also enabled for the YouTube SuperChat feature.[130]
From July 2021, Apple iPhone, iPad, and IPod Touch users in India can use UPI on App Store and iTunes Store.[131] As of 2021 NPCI International Payments Limited (NIPL) was planning to extend UPI to markets in the United States, West Asia and Europe.[132] On 4 August 2021, ICICI Prudential Life Insurance started supporting UPI AutoPay feature for insurance payment.[133][134]
In August 2021, Dish TV introduced UPI scan and pay feature for the first time in a nationwide rollout due to COVID-19 restriction and heavy demand for no contact digital payment solutions.[135] From 31 August 2021, Netflix integrated UPI AutoPay feature for Indian subscribers which was until now limited to credit and debit cards from Visa, Mastercard, American Express, and Diners Club International.[136] As per April 2021 RBI Monetary Policy Committee directive, after 31 March 2022, all the know your customer (KYC) compliant digital wallets will become interoperable by using UPI system.[137] In August 2021, Hotstar started supporting UPI AutoPay feature. The Hindu, Times Prime, PayU, Financial Software and Systems, Testbook Edu Solutions, Open Financial Technologies, Angel Broking and 5Paisa Capital moved to UPI AutoPay in September 2021.[138]
Due to high usage, Samsung Electronics integrated UPI barcode scanner directly into mobile camera application for faster payment.[139] On 3 January 2022, SonyLIV launched UPI AutoPay for all its subscribers.[140] NPCI with Jio introduced UPI AutoPay for prepaid and postpaid mobile subscribers from 6 January 2022.[141] Tata Mutual Fund with CAMSPay enabled UPI AutoPay feature for Systematic Investment Plan (SIP) from July 2022.[142] Google Play started supporting UPI AutoPay for subscription services from 15 November 2022.[143] Bangalore Metropolitan Transport Corporation (BMTC) will start UPI based ticketing system from 2023.[144] Lucknow Municipal Corporation (LMC) in collaboration with Paytm setting up QR code for housing tax.[145]
Kotak Mahindra Bank has rolled out the UPI payment facility for the Goods and Services Tax Network (GSTN) in the following states: Assam, Delhi, Goa, Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, and Odisha.[146] On 25 January 2024, North Western Karnataka Road Transport Corporation (NWKRTC) achieved a significant milestone by processing over one lakh UPI transactions, valued at over ₹2 crore. Additionally, the Karnataka State Road Transport Corporation (KSRTC), is also planning to accept UPI payments.[147] The Metropolitan Transport Corporation (MTC) has provided new handheld devices with UPI capability to its bus conductors in Pallavaram. Other bus depots in Chennai will also be included in the pilot experiment in future. For all MTC buses, the Tamil Nadu Infrastructure Development Board (TNIDB) intends to implement a QR-based ticketing system for UPI payment.[148] NPCI has integrated Kendriya Vidyalaya Sangathan with the Bharat Bill Payment System, allowing pupils to pay their school fees with UPI.[149]
At all Kolkata Metro booking counters for the Blue Line (Dakshsineswar–New Garia), a UPI-based ticketing system made accessible in June 2024. Each and every Automatic Smart Card Recharge Machine has already incorporated it. Additionally, all Green Line 1 and Green Line 2 stations (Howrah Maidan–Esplanade and Sealdah-Sector Five) now have UPI option.[150] With the goal of reducing reliance on third-party apps, minimizing unsuccessful payments, and streamlining the checkout process, Zomato and Swiggy launched their own UPI services. Zomato partnered with ICICI Bank, whereas Swiggy is utilizing the UPI Plugin to enable payment, doing away with the need for a TPAP license.[151][152]
International[edit]
Cross border digital payment service provider Liquid Group signed memorandum of understanding (MoU) with NIPL in September 2021 to introduce UPI based QR code payment system in Singapore, Malaysia, Thailand, Philippines, Vietnam, Cambodia, Hong Kong, Taiwan, South Korea, and Japan from 2022.[153][154] NIPL signed MoU with Arab Monetary Fund (AMF) on 8 March 2022 to link UPI with Buna Payment Platform that is connected with the central banks and financial institutions from Arab region. This will help in cross border multi currency transaction.[155][156] Till 4 July 2022, India already initiated talks with 30 countries for UPI integration.[157]
Singapore[edit]
UPI has been integrated with Singapore’s similar payment system called PayNow.[158] The PayNow is Singapore’s equivalent of India’s UPI, just like UPI the PayNow is also a near-instant real-time payment system developed by Association of Banks in Singapore.[159] PayNow interface facilitates inter-bank peer-to-peer and person-to-merchant transactions. The system is supported by all major Singaporean banks and is regulated by the Monetary Authority of Singapore (MAS) and works by transferring funds between two bank accounts. Same as UPI, the PayNow, can send payments to vendors or others just by sending payments to their phone number or via Virtual Payment Address (VPA).[158] Payments can be made to any registered Singaporean mobile number, NRIC, corporate Unique Entity Number (UEN) or Virtual Payment Address (VPA), or by scanning QR codes.[159][160] After the UPI and pay now integration, the people with Indian UPI can make online or real life payments in Singapore to anyone who has PayNow facilities sending money to the mobile number,QR Code, or VAN, etc. Similarly anyone who has Singapore’s pay now can send money to people or businesses who have UPI.[158]
UPI is accepted at merchant locations to ease transaction experience of Indian tourists.[161] The Reserve Bank of India (RBI) and Monetary Authority of Singapore (MAS) initiated a project to operationalise interoperability between UPI and PayNow in September 2021.[162][163]
The same channel in future will help connect Indian and ASEAN economies.[164] Close to 3,000 transactions per month are happening through a sharp reduction in remittance costs.[165]
Bhutan[edit]
On 13 July 2021, UPI was made available to Bhutan through Royal Monetary Authority of Bhutan.[166] Bhutan became the first country to accept UPI transactions through the BHIM app.
Malaysia[edit]
In 2021, Malaysian company Merchantrade Asia partnered with NIPL to send remittance in India through UPI infrastructure.[167]
United Arab Emirates[edit]
LuLu Financial Holding, a subsidiary of LuLu Group International signed MoU with NIPL in August 2021, to offer real time remittance to India from United Arab Emirates (UAE) and the Middle Eastern region.The MoU will help LuLu Financial Holding and its affiliates to connect with the UPI infrastructure and help in validation, compliance checks and facilitate all the requisite protocols for a safer cross border monetary transaction.[168] NIPL tied up with Mashreq bank in 2021 to increase UPI person-to-person (P2P) and person to merchant (P2M) transactions in UAE.[1]
Network International on 18 November 2021 signed MoU with NIPL for acceptance of UPI in UAE through its network. Merchants under Network International will be able to accept UPI payment from Q1 2022.[169] On 21 April 2022, UPI went live and started accepting payment through NeoPay, a payment subsidiary of Mashreq bank.[170] India also signed an agreement with UAE to link UPI with Integrated Payment Platform (IPP).[171]
On 29 March 2024, PhonePe announced that its users can pay with UPI at NeoPay terminals. The currency exchange rate will be shown and customers’ accounts will be debited in Indian rupees. To make payments easier, Indians living abroad who have mobile numbers in the UAE can download the PhonePe app and link their current NRE and NRO accounts. PhonePe will also launch inbound remittance services as soon as the corridor for inward remittances is activated, eliminating the need for information like bank account numbers and IFSC codes.[172]
Nepal[edit]
On 17 February 2022, NIPL announced that it will deploy UPI in Nepal for person to person (P2P), person to merchant (P2M) and to enable cross border remittances with India in collaboration with Nepal’s Manam Infotech and Gateway Payments Service.[173] Since Indian banks have not yet updated their mobile apps to include Nepal’s payment features, the digital payment system between Nepal and India has been delayed until December 2023. The banks in Nepal have finished their assignment.[174] Indian Ambassador to Nepal, Naveen Srivastava announced on 22 December 2023 that the first phased of digital payment between India and Nepal will start from February 2024.[175]
In an effort to simplify cross-border remittances, the Reserve Bank of India (RBI) and Nepal Rastra Bank (NRB) have signed the Terms of Reference for integrating the Unified Payments Interface (UPI) of India with the National Payments Interface (NPI) of Nepal.[176] NPCI and Fonepay Payment Service announced the launch of UPI for cross-border transactions on 9 March 2024.[177]
Nepal Rastra Bank began allowing Nepali citizens to pay merchants in India by scanning UPI QR codes from 27 June 2024. For commercial payments, there is a daily limit of ₹15,000 and a monthly limit of ₹100,000.[178] Fonepay handled over 100,000 UPI transactions in Nepal since February 2024, with a volume of over ₹250 million.[179]
France[edit]
NIPL signed MoU with French payment company Lyra Network, that will allow Indian tourists and students make payment using UPI in France.[180] France wants to offer Indian tourists visiting the famous Eiffel Tower in Paris the option to pay using UPI.[181] On 2 February 2024, NPCI and Lyra officially debuted UPI at the famous Eiffel Tower. The ability to scan QR codes with UPI has been made available for payment.[182] As of 3 July 2024, Galeries Lafayette on Haussmann Boulevard has been taking payments through UPI.[183]
United Kingdom[edit]
All POS terminals in UK under payment solution provider PayXpert will enable UPI based QR code payment in partnership with NIPL.[184][185]
Russia[edit]
India and Russia expressed interest in continuing dialogue on accepting UPI and Faster Payments System (FPS) of Central Bank of Russia within their respective national payment infrastructures.[186] As of August 2022, both nations started working on interaction between UPI and FPS.[187] In April 2023, Russia and India signed an official agreement for adaptation of SPFS in cross border transactions, acceptance of RuPay and UPI in Russia, and reciprocal acceptance of Mir and FPS in India.[188]
Oman[edit]
NPCI signed MoU with Central Bank of Oman on 4 October 2022 to connect UPI with similar system in Oman on a reciprocal basis.[189] It will make UPI QR code based payment available in the country and make it easier for Indian diaspora to send their remittance money in a cost effective way.[190] on 16 December 2023, Indian foreign secretary informed that both sides discussed utilizing the UPI stack with the potential corresponding digital stack in the Omani ecosystem.[191]
Qatar[edit]
Commercial Bank of Qatar announced launch of UPI service for remittance on 15 March 2023. The transactions can be completed within 60 seconds and will be available 24 hours, 7 days a week.[192]
Sri Lanka[edit]
On 21 July 2023, President Ranil Wickremesinghe and Prime Minister Narendra Modi signed an agreement for UPI acceptance in Sri Lanka.[193] On 14 October 2023, Narendra Modi announced that India and Sri Lanka are working on connecting UPI with Lanka Pay.[194] On 10 November 2023, the successful integration was shown by scanning LANKAQR with PhonePe. As per LankaPay CEO Channa de Silva, the integration will help Indian tourists pay in 450K+ locations in Sri Lanka.[195] The Ministry of External Affairs declared that on 12 February 2024, UPI would be introduced in Sri Lanka. The service will be formally launched via video conference by President Ranil Wickremesinghe of Sri Lanka and Prime Minister Narendra Modi, according to the Reserve Bank of India (RBI).[196]
PhonePe implemented cross-border UPI functionality with LankaPay on 15 May 2024. In Sri Lanka, Indian PhonePe users can pay with UPI by scanning the LANKAQR code.[197]
Mauritius[edit]
The Ministry of External Affairs of India declared that on 12 February 2024, UPI will be introduced in Mauritius. Prime Minister Narendra Modi and Prime Minister Pravind Jugnauth of Mauritius will formally inaugurate the service via video conference, according to the Reserve Bank of India. With this launch, Indian nationals visiting Mauritius and Mauritius nationals traveling to India will both be able to access UPI settlement services.[198]
Future markets[edit]
Australia[edit]
During a bilateral virtual summit on 21 March 2022, India proposed early integration of UPI with Australian New Payment Platform to improve higher education access and tourism potential.[199]
Europe[edit]
As per MoU signed on 11 October 2022, Worldline SA will enable European merchants’ POS terminals to accept UPI. The payment will be facilitated through Worldline QR code.[200] The initial market expansion will start with Belgium, the Netherlands, Luxembourg and Switzerland.[201]
Thailand[edit]
Bank of Thailand is planning cross-border remittances and QR based payment with India.[202] On 20 April 2023, at India-Thailand Joint Trade Committee meeting, officials from Department of Trade Negotiations, Ministry of Commerce of Thailand and Department of Commerce, Ministry of Commerce and Industry of India reviewed progress of connecting UPI and PromptPay.[203] Reserve Bank of India and Bank of Thailand are negotiating on the tie-up of UPI and PromptPay. Thapanee Kiatphaibool, governor of Tourism Authority of Thailand confirmed that the process is ongoing for the linkup.[204]
Saudi Arabia[edit]
During a meeting with Majid bin Abdullah Al Qasabi on 19 September 2022, Commerce and Industry Minister Piyush Goyal discussed on introducing UPI in the country. Operationalization of UPI is one of the priority area in bilateral Fintech collaboration.[205]
United States[edit]
The Clearing House is working with EBA Clearing and SWIFT for real-time USD-Euro payment called Immediate Cross-Border (IXB) that may launch in 2023. There are talks of payment corridor between IXB and UPI.[206] The US and India are developing a real-time payment linkage, and NPCI and banks in both countries are at an advanced stage of the talks. The goal of the plan is to expand on NPCI’s successes in establishing cross-country systems. Initially, the model would concentrate on modest consumer payments because the US does not yet have a statewide infrastructure that is comparable to what the NPCI has done with the UPI in India. The plan is for US banks, which currently account for a sizable portion of consumer wallets used for payments in the US, to collaborate with the NPCI and US authorities on the new model in order to maximize the current capacities. In order to provide a roadmap for how these transactions can occur directly between two countries, an internal working committee of the RBI has been investigating the best available technologies currently available in the market.[207]
Bahrain[edit]
As of 20 March 2023, Minister of Industry and Commerce Abdulla Adel Fakhro held talks with Indian counterparts after UPI-PayNow linkage.[208] In April 2023, preliminary discussion started to have similar partnership between Bahrain and India in cross border payment space.[209]
Japan[edit]
Japanese Digital Minister Taro Kono informed that after 49th G7 summit, a team from Japan will visit India to study the UPI system.[210] The Government of Japan is considering joining the network which can increase interoperability and can work as another standard of cross border payment.[211] Memorandum of understanding (MoU) was also signed by Japan and India during the G7 meeting to implement the digital stack, particularly the payment system. The Unified Payments Interface will be part of a digital payment stack architecture that the Japanese Monetary Authority and a few major banks will be adopting.[212]
Philippines[edit]
India started preliminary discussions regarding UPI cooperation with payment firms from Philippines. In June 2023, External Affairs Minister S. Jaishankar during a meeting with his counterpart, Enrique Manalo of the Philippines suggested cooperation in digital payment space. By forming a Joint Working Group (JWG) with members from the foreign and IT ministries, central banks, financial sector regulatory bodies, and other relevant authorities, both nations signed a memorandum of understanding on financial technologies. The JWG will determine areas of collaboration in the areas of digital governance, payment linkages, financial inclusion, interoperable API development, and the fintech industry, among others.[213]
Ethiopia[edit]
During the 6th session of the India-Ethiopia Joint Trade Committee (JTC) meeting at Addis Ababa, Indian delegation sought to collaborate with Ethiopia on digital payment solution space by integrating UPI and Ethswitch. The proposal is to explore settlement of trade transactions in the local currency to boost bilateral trade and conserve foreign exchange.[214]
New Zealand[edit]
As per Ministry of Commerce and Industry, India started discussion with counterparts from New Zealand on introduction of UPI to promote ease of doing business, trade and tourism between both nations. The discussion took place during a bilateral meeting between Piyush Goyal and Damien O’Connor from Ministry of Foreign Affairs and Trade.[215]
Ghana[edit]
Within the first half of 2024, India and Ghana have committed to working “expeditiously” to operationalize UPI on the Ghana Interbank Payment and Settlement Systems (GHIPSS). The conversation took place during the Joint Trade Committee (JTC) meeting on May 2, 2024.[216]
Cambodia[edit]
The media was notified by the Ministry of Commerce and Industry on 19 June 2024, that negotiations are underway between India and Cambodia to collaborate on UPI-based digital payments in order to foster bilateral trade and tourism.[217]
Foreign collaboration[edit]
To create an immediate payment system for Namibia that is similar to UPI, NIPL and the Bank of Namibia (BoN) signed a deal on 2 May 2024. Enhancing interoperability, cost, and connectivity with local and worldwide payment networks are all part of this. Strengthening digital financial services and supporting real-time merchant (P2M) and person-to-person (P2P) payments are the goals.[218] Kenya and Mozambique are also in negotiations with India. In order to share UPI as part of digital public infrastructure solutions, India signed memorandums of understanding with Antigua & Barbuda, Armenia, Sierra Leone, and Suriname in June 2023.[219]
Project Nexus[edit]
The Bank for International Settlements signed an agreement with Central Bank of Malaysia, Bank of Thailand, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, and the Reserve Bank of India on 30 June 2024 as founding member of Project Nexus, a multilateral international initiative to enable retail cross-border payments. Bank Indonesia involved as a special observer. The platform, which is expected to go live by 2026, will interlink domestic fast payment systems of the member countries.[220]
