India’s Unified Payments Interface (UPI) continues to grow at a breakneck pace. As per a recent news article, this year’s transaction volume and value have virtually doubled compared to the previous year, rising 99% in volume and 90% in value.
In some ways, UPI has transformed India’s digital economy and has accelerated the country’s transition to a cashless society. Hence, several countries have been closely watching UPI’s growth and its ability to do real-time payments at a large scale. UPI has received global attention and growth because it:
- Is convenient, as the user must remember just the recipient’s name and phone number.
- Is faster than earlier payment solutions.
- Offers an easy refunds mechanism that allows fast reversal of failed transactions.
- Provides cross-operability of authentication, with the UPI transaction PIN the same for all UPI payment applications. Everyone, from banks to third-party applications such as Google Pay, Amazon, or WhatsApp, uses the same PIN.
- Is compatible with all devices and accessible in several ways (even by feature phone users).
India’s UPI system is notably more advanced than the payment systems available elsewhere in the world. According to ACI Worldwide, India accounted for the most real-time transactions in 2021 (48.6 billion). This was 6.5 times the transaction volumes for the USA, Canada, the UK, France, and Germany combined, and it is over three times that of China, which is second in the list.
The current Indian Prime Minister, in his speech at Digital India Week 2022, stressed UPI going beyond Indian borders, making this topic even more intriguing. You can watch the speech here.
- Nepal became the first country to embrace the UPI payment system. This project will promote more people to use digital payment systems, speed up cashless transactions in Nepal, and allow instant P2P (person to person) and P2M (person to merchant) UPI payments.
- Bhutan has already adopted UPI standards for its QR code along with the introduction of the BHIM UPI mobile application.
- Singapore and India are connecting UPI to PayNow in Singapore to enable quick, low-cost, cross-border financial transfers. It is expected to be live in the second half of 2022.
- In the United Arab Emirates, the National Payments Corporation of India (NPCI) has teamed with Mashreq, one of the UAE’s top financial institutions, to offer UPI acceptance in the country.
- In France, the NPCI has signed an MoU (memorandum of understanding) with Lyra Network for acceptance of UPI and RuPay in the country.
We expect UPI to evolve as a key to decentralization of payment platforms in the international market. It would be interesting to see its adoption on a global scale in some form.
Over the next few months, we will continue to follow these initiatives, share insights, and report on the UPI landscape and implications for consumers, economies, and businesses alike.