'UPI’s partnerships can streamline transaction routes for users in foreign lands': Mohan K of TechFini

The Unified Payments Interface (UPI) has been a game-changer in the digital payments sector since its inception in 2016. Developed by the National Payments Corporation of India (NPCI), UPI has seamlessly integrated itself into the everyday financial activities of countless Indians. Data analyzed by the global payments hub Paysecure earlier this year revealed that the UPI has become the most widely used alternative payment method in the world, with a staggering 3729.1 transactions processed per second in 2023. This marks a significant 58% increase from the 2,348 transactions per second recorded in 2022.

Since its regulation by the Reserve Bank of India in 2016, UPI has enabled users to instantly transfer funds between bank accounts, making it a reliable and efficient real-time payment system.

India is leading the global market in digital transactions, with over 40% of payments being conducted digitally, with majority of them utilising UPI. In the period of April-July 2024, UPI processed transactions worth Rs 80.8 lakh crore ($964 billion), reflecting a significant 37% year-on-year increase compared to the same period in the previous year. In July alone, UPI transactions amounted to Rs 20.64 lakh crore or about $247 billion. The value of transactions on UPI has consistently exceeded Rs 20 lakh crore for the past three months. In October, UPI technology hit a new record with a total of 16.58 billion transactions amounting to Rs 23.50 lakh crore due to the festive season.

Recently, NIPL inked a partnership with the Ministry of Digital Transformation in Trinidad and Tobago to create an all-encompassing digital payments system. This system will enable smooth and secure person-to-person and person-to-merchant transactions for residents. The agreement, disclosed on September 27, 2024, underscores India's aspirations to be a significant player in the global digital payments sector.

In a similar vein, earlier this year, NIPL struck deals with Peru and Namibia, marking its initial foray into the Latin American and African markets. These countries intend to utilize UPI as a model for developing their own payment platforms, tapping into the expertise and infrastructure that NPCI has cultivated in India.

Business Today spoke to Mohan K, Founder of fintech startup TechFini, about the reach of UPI and its expansion in other countries.

In July, TechFini attained official certification from the National Payments Corporation of India (NPCI) to serve as a provider of payment infrastructure based on the Unified Payments Interface (UPI) for banks and fintech companies. This approval enabled TechFini to operate as a UPI issuer 2.0, UPI acquirer 2.0, issuer and acquirer of credit lines using UPI, and facilitator of RuPay credit cards, among other services.

1. How will the expansion of UPI's international partnerships impact cross-border payments for Indian users?

The expansion of UPI's international partnerships will significantly enhance cross-border payments for Indian users by making them more seamless, faster, and cost-effective. Indian users will benefit from easier access to UPI’s trusted and user-friendly payment method while traveling or conducting transactions abroad, reducing reliance on traditional banking and currency exchange methods. This integration simplifies the process, making international payments as seamless as domestic ones. One of the most significant advantages is the speed at which transactions can be processed. 

Traditional cross-border payments often involve multiple intermediaries, leading to delays, but UPI’s partnerships can streamline these routes, enabling faster processing times that benefit not only individuals but also businesses requiring quick remittances or financial transfers.

Cross-border transactions typically come with various service fees and unfavourable exchange rates, but UPI’s expansion can lead to lower fees by reducing the need for third-party processors. This financial efficiency is especially valuable for small businesses and individuals who regularly send or receive money internationally. Furthermore, the extended reach of UPI can foster better financial inclusion and facilitate a more integrated global payment network.

2. What steps can consumers take to resolve issues or disputes when using UPI payments abroad?

If consumers face issues or disputes while using UPI payments abroad, first, they should verify the transaction details, including the recipient's UPI ID and payment amount. If the issue is with a merchant or individual, contacting them directly may help resolve the matter faster. If that doesn’t work, consumers should reach out to their bank's customer support, as most banks have dedicated channels for UPI-related disputes. Many UPI apps, also have built-in dispute resolution features that allow users to raise complaints directly within the app. In cases where the payment was processed via a third-party payment gateway, contacting their support can also help. If the issue remains unresolved, consumers can escalate the matter to NPCI by filing a complaint. Throughout the process, it’s important to keep track of the complaint status, follow up regularly, and maintain documentation like transaction details, receipts, and communication records to support the case.

3. What security features should consumers be aware of when using UPI for their transactions in foreign lands?

When using UPI abroad, consumers need to authenticate each transaction with a UPI PIN, which provides a layer of security, ensuring that only authorized users can complete transactions. End-to-end encryption is employed to protect all transaction data, ensuring that sensitive information is securely transmitted between the user’s device and the bank’s servers, preventing interception by third parties. Additionally, UPI platforms have fraud detection systems in place that monitor transaction patterns for any signs of suspicious activity. If anything unusual is detected, the transaction may be flagged or blocked for further investigation. Consumers should also ensure they enable transaction alerts via SMS or email to receive immediate notifications of any activity in their accounts, helping to spot unauthorized transactions quickly. When making payments abroad, it's advised to avoid using public Wi-Fi networks, which can be insecure, and instead rely on a VPN or secure mobile data to protect their connection. Lastly, UPI has transaction limits to act as a safeguard against large unauthorized transactions. Users should set temporary lower limits to reduce the risk of potential losses from unauthorized access, and these limits can be adjusted anytime through their bank’s app.

4. Will new features in UPI Lite help users abroad?

As of now, UPI Lite is mainly available for domestic use in India. While UPI has expanded internationally in countries like Singapore and the UAE, UPI Lite is not yet widely available abroad. Its availability outside India will depend on future partnerships and regulatory approvals. Once UPI Lite is rolled out internationally, it's expected to simplify small, low-value transactions for users abroad.

Features like automatic top-ups are helpful for Indian users abroad by ensuring their UPI Lite balance is always sufficient for small, everyday transactions without needing manual reloading. When the balance falls below a certain threshold, users need to reload UPI Lite within the permitted top-up limit before making a transaction, so users won’t have to worry about running out of funds mid-transaction. Additionally, it offers seamless, cost-effective payments for everyday purchases like food or transport, without needing a PIN.