Centre, RBI weigh linking UPI with Singapore’s Alipay+ for cross-border payments

Potential UPI-Alipay+ Linkup Signals Bold Step in Global Payments

India's bustling digital payments scene could soon extend its reach far beyond its borders, as the central government and the Reserve Bank of India (RBI) engage in talks with Ant International to connect the Unified Payments Interface (UPI) with Alipay+.

This move aims to simplify transactions for Indian travelers abroad, allowing them to use their familiar UPI apps at merchants signed up with Alipay+ across various countries.

UPI, which has revolutionized domestic payments with its instant, low-cost transfers via QR codes, now eyes international expansion to match its domestic dominance, where it processes billions of transactions monthly.

The discussions mark a significant push to make cross-border payments as seamless as local ones, reducing reliance on forex cards or cash exchanges that often come with high fees and delays.

With UPI boasting around 400 million active users in India, linking it to Alipay+—a platform that connects over 1.8 billion user accounts and 150 million merchants worldwide—could unlock effortless spending for tourists in regions like Southeast Asia, the Middle East, and beyond.

Ant International, headquartered in Singapore and focused on cross-border tech, operates Alipay+ as a merchant gateway that handled more than two billion such transactions last year.

Building on UPI's Rapid International Growth

UPI's journey from a homegrown system to a global contender has been swift.

Just last year, it partnered with Singapore's PayNow for real-time transfers between the two nations, followed by collaborations like one with PayPal and even pilots linking to Europe's TARGET Instant Payment Settlement service.

These steps, bolstered by a new Free Trade Agreement with the European Union emphasizing payments interoperability, position UPI as a key player in reshaping inefficient global remittances.

Domestically, UPI hit a record 21.7 billion transactions in January alone, underscoring its maturity and readiness for wider adoption.

This potential tie-up with Alipay+ fits into RBI's strategy to raise transaction limits and integrate credit options, keeping users in the UPI ecosystem even overseas.

For Indian tourists, who often face hurdles with foreign merchants, this could mean scanning a single QR code for instant payments, much like at home.

It's a natural evolution, especially after earlier integrations with Singapore-based firms like HitPay for tourist spots there.

As ties with international partners warm, UPI's expansion promises to cut costs and frictions that plague traditional cross-border methods.

Implications Amid Evolving Geopolitical Ties

The talks with Ant International, once linked to China's Ant Group but now independently run from Singapore, reflect thawing relations in fintech despite past tensions.

Integrating UPI with platforms like Alipay+ will empower our 400 million users to make seamless payments abroad, slashing costs and boosting convenience while maintaining the security of our robust ecosystem, said a senior banking executive familiar with the discussions.

India had banned certain Chinese apps, including Alipay, in 2020 over security concerns, but this collaboration focuses on Alipay+'s global arm, emphasizing merchant connectivity over direct consumer apps.

Both UPI and Alipay+ share QR-code reliance, bypassing cards, though their origins differ—UPI as a government-led infrastructure, Alipay+ from private e-commerce roots.

This synergy could bridge vast user bases, with India's real-time payments volume leading the world.

For merchants on Alipay+, onboarding Indian spenders via UPI opens new revenue streams from a high-volume market.

Travelers benefit from unified wallets, avoiding multiple apps or currency conversions.

Yet, as discussions remain private, officials from the Finance Ministry, RBI, and National Payments Corporation of India have not commented publicly.

Ant International's role in digitizing cross-border flows across Asia, Europe, and beyond adds credibility to the partnership's potential.

In summary, the Centre and RBI's exploration of UPI-Alipay+ integration promises easier global payments, building on UPI's stellar growth and prior international links. This could transform travel spending, foster economic ties, and solidify India's fintech leadership, all while prioritizing user security and efficiency.