India is planning a major expansion of its UPI payments platform aiming to onboard between 200 to 300 million additional users to its real-time digital payments system. This move is part of a dual strategy to deepen domestic adoption and promote the platform internationally.
According to Dilip Asbe, Managing Director and CEO of the National Payments Corporation of India (NPCI), the organization intends to reach this goal through initiatives such as delegated accounts for groups often excluded from traditional banking — including children and household staff. The aim is to help these individuals “break their cash memory” and transition to digital payments.
Over the past five years, UPI payments platform has revolutionized retail payments for over 450 million Indians. It enables smartphone users to pay for everything from everyday items to large purchases by scanning QR codes, allowing seamless transactions of up to ₹500,000 ($5,817) directly from their bank accounts — and notably, without incurring transaction fees so far.
This widespread adoption has helped India account for nearly 46% of global digital transactions, with retail digital payments growing 90-fold in just 12 years, according to a PwC report. Now, NPCI, along with the Indian government and the Reserve Bank of India (RBI), is keen on leveraging this domestic success to promote UPI payments platform internationally.
“The idea is to make remittances very affordable and real-time to all the diaspora,” Asbe said.
To support domestic growth, NPCI is also focusing on enhancing UPI’s accessibility. Plans are underway to broaden its multilingual capabilities and add conversational chat features. There are also pilots involving vision recognition technology aimed at boosting UPI use for things like parking payments.
NPCI is further exploring ways to expand its credit offerings. UPI already supports small-ticket loans, but Asbe noted that the platform’s underlying technology could assist lenders in evaluating creditworthiness and managing collections based on user repayment behavior.
“The credit-as-a-service model will also evolve and get some scale in the next three to five years,” he added.
On the global front, the Indian government has enlisted its embassies to promote UPI, while the RBI has reached out to multiple countries to encourage adoption. This effort is partly driven by the massive volume of remittances from the Indian diaspora, which totaled a record-breaking $129 billion in 2024, the highest figure ever reported by any country in a single year, per a World Bank report.
Besides remittances, UPI is also being positioned to facilitate cross-border payments for things like overseas education. “It might take time because other countries are at a different stage of real-time payments system stabilization,” said Asbe.
Initially, UPI transactions included a merchant discount rate (MDR) of 30 basis points. However, the government eliminated the fee in 2020 to accelerate user adoption. While merchants were later compensated through government incentives, these payments dropped significantly — from ₹36 billion in 2024 to ₹15 billion the following year — prompting industry calls for the MDR to be reinstated.
A survey by LocalCircles, covering 32,000 participants, found that 73% of UPI users would stop using the service if a fee was reintroduced. This indicates that even a small charge could significantly slow down UPI’s momentum.
Asbe noted that the UPI ecosystem is working with the government and RBI to make the system financially sustainable, saying, “by creating a small fee for the large merchants.”
