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UPI and the future of cross-border payments

In a world marred with geopolitical tensions, and wobbly banking systems, India’s UPI stands out as a clear winner of its objective. This gains traction as the richest countries of the world — Japan, Singapore, and the like — besides those from the other end (the likes of Sri Lanka), look into the technology that India boasts of through the Unified Payments Interface (UPI).

This year, we have seen the government taking UPI as an offering across borders. In February 2023, UPI and Singapore’s PayNow were integrated, making payments between Singapore and India seamless and easy.

Later, at the G7 summit in May, Japan’s minister of digital affairs, Taro Kono said the country is seriously thinking of joining the UPI payment system to facilitate payments between Japan and India. Efforts were also underway to expand the linkage of UPI platform to other jurisdictions, including the UAE, Mauritius, and Indonesia. This expansion seeks to facilitate seamless cross-border transactions and further enhance the capabilities of the UPI platform.

Well, that is not it. In a rapidly changing environment post the demonetisation of high denomination currency notes in India in 2016, added with the announcement by the Reserve Bank of India (RBI) about the withdrawal of ₹2,000 notes, there is all the more push for daily payments to go digital.

Unified Payment Interface (UPI) transactions hit a high of more than 10.55 billion transactions, until September 30, 2023, according to the data provided by the National Payments Corporation of India (NPCI). The overall value of transactions stood at Rs 15.79 lakh crore in September 2023, above the Rs 15.76 lakh crore recorded in August 2023. The value of transactions was at Rs 11.16 lakh crore in September 2022.

Post the economic challenges arising from the COVID-19 pandemic, UPI has already reshaped domestic transactions within the country. Since then UPI as a payment platform has only grown from strength to strength. 

UPI uses in everyday life

As a payment system, UPI has become an essential part of our daily lives. In fact, UPI is used to make payments pretty much everywhere, from merchant establishments to ride-share apps, to vegetable vendors, or even to the local pani puri seller.

We are seeing a lot of other innovations in the UPI space. Recently, leading food aggregators and certain AI-driven chatbots, too, launched their own versions of integrated UPI solutions. 

How UPI can transform cross border payments

According to a recent study, the worldwide expenditure on B2B cross-border payments is projected to surpass $40 trillion by the end of 2024. This represents an increase from $37 trillion in 2022. 

Traditional cross-border payments have long been characterised by complexity, high costs, and time-consuming processes. The introduction of UPI presents a remarkable opportunity to revolutionise this landscape.

The advantages of UPI

UPI’s success in transforming domestic payments in India can be attributed to some of its distinct features. The same can make UPI a strong contender to emerge as a winner in the cross-border payment space. 


Traditional international payment systems often entail substantial transaction fees and hidden charges, making them costly for businesses and individuals. UPI’s transparent fee structure and low transaction costs can considerably reduce expenses, making international payments more accessible and affordable.


UPI’s real-time payment capabilities can significantly shorten settlement times, enabling businesses to receive funds faster and individuals to send remittances promptly.


Security is a critical aspect of international payments, considering the risks of fraud, data breaches, and unauthorised access. UPI’s robust security measures, including two-factor authentication, and encryption, ensure secure international transactions, protecting sensitive financial information and reducing the risk of fraudulent activities

According to government data, the top five countries in 2021-22 from which India received the maximum inward remittances are the United States, United Arab Emirates, United Kingdom, Singapore, and Saudi Arabia — countries with a significant NRI population.

As the UPI payment ecosystem spreads to other countries, it looks like the process will get a lot easier and cost-effective to conduct transactions, and in the process boost the Indian economy.