International UPI Corridors

International UPI Corridors refer to cross-border payment linkages that enable users of India’s Unified Payments Interface (UPI) to make and receive digital payments across national boundaries. These corridors connect India’s domestic real-time payment infrastructure with foreign payment systems, allowing seamless person-to-person and person-to-merchant transactions using mobile devices. In the context of banking, finance, and the Indian economy, international UPI corridors represent a major innovation in cross-border payments, enhancing financial inclusion, reducing transaction costs, and promoting India’s digital payment leadership globally.

Concept and Meaning of International UPI Corridors

An international UPI corridor is a bilateral or multilateral arrangement through which UPI is interoperable with a foreign country’s payment system. Under this mechanism, Indian users can pay overseas merchants or individuals using UPI, while foreign users may also be able to transact with Indian counterparts, depending on the corridor design.
Transactions are executed in real time, authenticated through mobile-based credentials, and settled through regulated banking channels. Currency conversion is handled transparently, enabling users to transact without holding foreign cash or cards.

Evolution of UPI and Its Global Expansion

UPI was developed as a domestic digital payments platform and has transformed retail payments in India. Its success in delivering low-cost, instant, and secure transactions has laid the foundation for international expansion.
The global outreach of UPI is facilitated by the National Payments Corporation of India through its international arm, which works with foreign regulators, central banks, and payment operators. This expansion aligns with India’s objective of exporting digital public infrastructure as a global public good.

Structure and Working of International UPI Corridors

International UPI corridors typically involve linkage between UPI and a partner country’s real-time payment system. When an Indian user initiates a payment abroad, the transaction is routed through the UPI platform and the partner system, with settlement occurring through designated banks.
Key features include:

• Real-time transaction processing.
• Use of QR codes or mobile identifiers.
• Automatic currency conversion at transparent rates.
• Settlement through regulated banking arrangements.

This structure ensures speed, security, and convenience comparable to domestic UPI transactions.

Role in Banking and Financial Institutions

Banks play a critical role in international UPI corridors as settlement entities, foreign exchange intermediaries, and compliance gatekeepers. Participating banks facilitate onboarding of customers, manage cross-border settlements, and ensure adherence to regulatory requirements.
For banks, international UPI corridors:

• Expand cross-border retail payment offerings.
• Reduce reliance on correspondent banking networks.
• Lower transaction costs and settlement times.
• Enhance customer experience for international payments.

These corridors also open opportunities for banks to develop innovative remittance and merchant payment solutions.

Relevance to the Indian Economy

International UPI corridors have significant implications for the Indian economy, particularly in areas such as tourism, remittances, and small-value cross-border trade. Indian travellers can make payments abroad using familiar UPI apps, reducing dependence on cash and international cards.
For inward remittances, UPI-based corridors offer faster and cheaper alternatives to traditional remittance channels. This is especially beneficial for India, one of the world’s largest recipients of remittances, as it improves household incomes and foreign exchange inflows.

Impact on Cross-Border Remittances

Traditional cross-border remittances are often expensive and time-consuming. International UPI corridors address these inefficiencies by enabling near-instant transfers at significantly lower costs.
Benefits include:

• Reduced transaction fees.
• Faster credit to beneficiaries.
• Greater transparency in exchange rates.
• Improved access for migrant workers and small remitters.

These features strengthen financial inclusion and formalisation of remittance flows.

Regulatory Framework and Oversight

The operation of international UPI corridors is subject to regulatory oversight to ensure financial stability, consumer protection, and compliance with foreign exchange regulations. In India, the Reserve Bank of India provides policy direction and regulatory approvals for cross-border payment arrangements.
Coordination with foreign central banks and regulators ensures alignment with local laws on payments, data protection, and anti-money laundering standards. Such cooperation is essential for trust and scalability of international corridors.

International Partnerships and Adoption

India has established international UPI corridors with several countries through bilateral agreements and payment system linkages. These partnerships reflect growing global recognition of India’s digital payment infrastructure.
International adoption supports:

• Greater acceptance of Indian payment systems abroad.
• Strengthening of bilateral economic and financial ties.
• Promotion of India’s fintech ecosystem globally.

Over time, expansion into additional regions can enhance network effects and global usability.

Advantages of International UPI Corridors

International UPI corridors offer multiple advantages:

• Low-cost and real-time cross-border payments.
• User-friendly and familiar payment experience.
• Reduced dependence on cash and cards.
• Support for digital trade and tourism.