UPI has experienced remarkable growth in recent years, solidifying its position as a global player. UPI and Rupay are available in over 18 countries, including Singapore, Nepal, Bhutan, and the United Arab Emirates (UAE), catering to the needs of Indian travellers. Non-resident Indians (NRIs) can make UPI payments through their local phone numbers in 10 countries, including Australia, Canada, the UAE, Oman, Qatar, Singapore, Hong Kong, the UK, and the US.

However, UPI faces a market concentration challenge in India due to its exponential growth and limited customer alternatives. Addressing this challenge would involve exploring innovative solutions and expanding the range of providers to ensure a healthy competitive landscape. Additionally, to make UPI viable for global markets, India must establish a messaging system that caters to international payments.

UPI utilises the UPI Message Format (UMF), designed specifically for domestic payments within India. In contrast, SWIFT messaging standards are widely used globally in the banking and financial industry to facilitate international transactions and communications. As India envisions UPI’s future on the global stage, bridging the gaps between UPI’s messaging system and international standards is crucial.

To position UPI as a global player like SWIFT, several challenges must be addressed:

Internationalisation: UPI must establish partnerships with international financial institutions, payment service providers, and regulatory bodies to expand globally.

Cross-border transactions and forex exchanges: UPI must develop capabilities for facilitating cross-border transactions and handling different currencies.

Standardised messaging formats and protocols: UPI would benefit from developing standardised messaging formats that align with global standards for cross-border payments.

Strengthened security measures and compliance frameworks: To meet the stringent requirements of international financial systems, UPI must implement robust authentication protocols and ensure adherence to international security standards.

Scalable and resilient technology infrastructure: UPI needs a scalable and resilient technology infrastructure capable of handling increased transaction volumes for global operations.

Strategic alliances and partnerships: UPI could benefit from forging strategic alliances and partnerships with global payment networks, banks, and fintech companies.

Regulatory compliance: UPI would need to navigate the regulatory landscapes of different countries and align with international payment regulations and standards.

Now is the moment for UPI, government and RBI to craft a visionary alternative. This imperative emerges from a confluence of elements, including syncing with India’s far-reaching aspirations, acknowledging UPI’s burgeoning stature in cross-border transactions, and realising the influential role India is poised to wield in the global arena. The proactive pursuit of cutting-edge payment architectures will not only safeguard the momentum of India’s digital payments evolution, but also empower the nation in sculpting a financial tomorrow that is both robust and streamlined.

Geopolitical currents, the fine-tuning of regulatory frameworks, and the pulse of market trends will shape the path of UPI’s ascendancy to the world stage. As UPI charts its growth trajectory, the interplay of alliances, technological innovations, and regulatory strides will be instrumental in molding its destiny as a global contender. It becomes indispensable to adopt an unrelenting dynamism, perpetually assessing and trailblazing, to ensure that the bedrock of India’s payment systems is steadfast, adaptive, and in sync with the ever-transforming demands of enterprises and individuals alike.

The writer is a global expert in fintech and payments