UPI’s global push seems an economic strategy

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The big story

Money seems to be moving a lot faster in India compared to the mobility of the people carrying out the transactions, and nowhere was that more evident than at the Global Fintech Fest in Mumbai’s Bandra Kurla Complex last week.

While delegates navigated traffic jams at India’s financial capital and dealt with a lack of last mile connectivity, inside the conference halls, product launches highlighted how transferring money had become as easy as sending a WhatsApp message.

Catalyzing that digital transformation is India’s Unified Payments Interface, or UPI, as it breaks out of its domestic sandbox and wires itself into the global money grid.

The headline announcement at the fintech fest came from PayPal, as India’s UPI became the first payments system to be integrated on the PayPal World platform for international transactions.

“Everywhere I go, India comes up,” said PayPal CEO Alex Chriss at GFF 2025, noting the country’s growing reputation as a place where talent, capital and commercial opportunities converge.

PayPal is helping in India’s quest for expanding UPI globally, with experts saying that the payment system is now part of the country’s diplomatic toolkit. A speaker at GFF called it “India’s fintech diplomacy.”

Just a day before PayPal’s announcement, Indian Commerce Minister Piyush Goyal launched UPI in Qatar— the eighth overseas destination to join the payments platform — highlighting growing economic integration between the two nations. “Our people will be able to trade more, trade smarter, at lower cost,” Goyal said.

The deeper you look at the UPI transaction numbers, its international rollout is beginning to appear less like a tech story and more of an economic strategy.

According to the Indian government, UPI, which was launched in 2016 by the National Payments Corporation of India, leads the world in processing real-time payments, handling more than 640 million transactions a day, compared to Visa’s 639 million.

UPI’s global rollout comes at a time when Indian travelers and overseas workers are driving record volumes of cross-border transactions. It is not just an opportunity for UPI but also for international money transfer platforms such as Wise and Briskpe.

“India’s cross-border payment needs are growing from multiple directions,” said Taneia Bhardwaj, South Asia expansion lead at Wise, which claims to power 10% of India’s inbound remittances.

“Indians are spending longer periods abroad and need better tools to manage money across borders,” Bhardwaj added.

For starters, India’s outbound transaction opportunity is growing. In 2024, 30.8 million Indians traveled overseas — an 10.8% jump from a year earlier.

India’s international spending touched $35 billion in 2024, according to UN Tourism, and has seen rapid growth over the past few years as young professionals, tourists, and entrepreneurs increasingly travel overseas.

India’s plans to extend UPI to more than 20 countries by March 2029 are set to “transform” cross-border remittances, according to an NPCI-BCG report that was released at GFF.

India was the top recipient of remittances among low- and middle-income countries in 2024 at $129 billion, followed by Mexico at $68 billion and China at $48 billion, according to World Bank estimates.

“India is engaged much more in global financial transactions than what its goods exports suggest. This is on account of a) it large services trade b) remittance inflows and outflows and c) capital market transactions,” said Amitendu Palit, senior research fellow at Institute of South Asian Studies.

“All of these will be facilitated by UPI and its interoperability with other digital payment platforms,” he said, adding that linkages of UPI with PayNow in Singapore and PromptPay in Thailand are “already giving good results.”

For fiscal year ended March 2025, India reportedly saw remittances more than double to $135.46 billion, from $61 billion in fiscal year ended March 2017.

Experts say that traditional banks and forex providers typically mark up the exchange rate by 3% to 3.5% and are not too transparent about that.

“You might see ‘zero fees’ advertised, but they’re making money by giving you a worse exchange rate than the actual mid-market rate — the one on Google. Then there are additional charges — dynamic currency conversion fees, foreign transaction fees, ATM withdrawal fees, account maintenance fees,” said Bhardwaj.

These high, hidden costs are not just a pain for the end recipient but also cause for worry for the government, experts said.

If the government can reduce the transaction costs by offering UPI’s payment service for cross-border transactions at a competitive rates, it will also push other providers to bring their costs down. “With UPI infrastructure also being cheaper as compared to other networks, the overall cost of remittance in the economy decreases, not just for India but also for the partner country,” the NPCI-BCG report said.

Lower transaction costs mean more remittances coming into the country instead of getting lost with currency middlemen, said Priyanka Kishore, principal economist at Asia Decoded.

“Growing remittances and booming digital exports have pushed the current account deficit below 1% of GDP even as the goods trade deficit widened to around 8% in the last couple of years,” she said. Remittances have a positive impact on India’s balance of payments as they cut current account deficit, while providing a stable source of foreign exchange.

India’s CAD is expected to be at 1.2% of its GDP in the current financial year, while trade data shows deficit widened by nearly 32% to $32.5 billion in September from a year earlier.

No wonder, UPI going international is a cause for both pride and celebration for the government.

“UPI’s international expansion is great for the ecosystem because it validates that Indian payment infrastructure can work globally. It also sets a benchmark for what Indian consumers expect – instant, transparent, seamless transactions,” said Bhardwaj.

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Need to know

Google to invest $15 billion to build data center hub in India. The U.S. tech giant will invest $15 billion to build data center capacity for a new artificial intelligence hub in southern India over the next five years. It will be Google’s largest AI hub in the world outside of the U.S.

LG Electronics India overtakes parent company in market cap. The company’s shares surged as much as 50% on debut, after its initial public offering saw the strongest demand for an Indian IPO since 2008, led by institutional investors.

A discord is brewing in the boardroom of Tata Trusts, which controls 66% of Tata Sons. The root of the current dispute is Tata Sons sidestepping the need to receive prior approval from Tata Trusts for any major financial investments. Some in trustees see this as undermining the rights of Tata Trusts.

In the markets

The Nifty 50 index and the BSE Sensex were trading 0.4% higher as of 9:45 a.m. local time. The indexes have gained 7.5% and 6%, respectively this year.

The benchmark 10-year Indian government bond yield was at at 6.490%.

Coming up

Oct. 17: Shares of Canara HSBC Life Insurance list on exchanges

Oct. 21: Closure of National Stock Exchange for Diwali

Oct. 22: Partial closure of National Stock Exchange for Diwali

Each weekday, CNBC’s “Inside India” news show gives you news and market commentary on the emerging powerhouse businesses, and the people behind its rise. Livestream the show on YouTube and catch highlights here. 

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