In the 16 years that have followed its creation in 2008, the National Payments Corporation of India (NPCI), the organisation behind the Unified Payments Interface (UPI), India’s top digital payment system, has come a long way.

Since it was launched in 2016, UPI has revolutionised commercial transactions in India, allowing for payments for any sum, starting from sums as low as INR 1 and as a result it has close to a billion users in the country and over a billion transactions are recorded every day on UPI, making it the single largest digital payments system in the world.

UPI’s popularity is due to its seamless instantaneous payment capabilities

UPI’s popularity is due to its seamless, instantaneous payment capabilities, allowing users to transfer money directly between bank accounts via their smartphones. And all this at no cost to the consumer, giving UPI a huge advantage over rival systems that charge for the same.

Over the years, UPI has redefined financial transactions domestically, but its influence is now extending beyond India’s borders, as an increasing number of foreign countries embrace UPI.

This global expansion is set to transform the travel experience for Indian tourists, providing them with greater convenience, security and comfort while shopping abroad, the expansion is not only beneficial for Indian travellers but also has broader economic implications.

Journey of UPI from India to the World

UPI was designed to facilitate easy and quick transactions within India, offering users a simple interface to send and receive money

Initially, UPI was designed to facilitate easy and quick transactions within India, offering users a simple interface to send and receive money, pay bills and make purchases. The rapid adoption of smartphones and the internet in India created a fertile ground for UPI’s success. As digital payments surged, the NPCI began exploring the potential for international expansion.

The journey began in 2021 when Bhutan became the first foreign country to adopt UPI, enabling Indian travellers to make direct payments using their Indian bank accounts. This partnership not only catered to the influx of Indian tourists but also showcased Bhutan’s commitment to embracing modern payment solutions. The success in Bhutan encouraged other countries in the region, such as Nepal, to adopt UPI, significantly simplifying transactions for Indian visitors.

The Middle East has emerged as a significant market for UPI, primarily due to the large Indian expatriate community residing in countries like the United Arab Emirates (UAE) and Qatar. In 2022, the UAE became one of the first countries outside of South Asia to accept UPI payments, allowing Indian tourists and expatriates to use their preferred payment method while shopping, dining and engaging in other activities.

As more countries recognise the benefits of UPI, its acceptance is expected to expand further into Europe, Australia and other popular travel destinations

The adoption of UPI in Singapore shortly after the UAE marked another milestone in its global journey. The island nation, known for its diverse shopping landscape, welcomed UPI to cater to the growing number of Indian tourists seeking luxury shopping experiences without the hassle of currency exchange or unfamiliar payment methods.

The NPCI broke through another key frontier earlier this year when it launched UPI in France in January, with Eiffel Tower in Paris, said to be the world’s most visited monument, accepting UPI. Since then, a leading luxury departmental store, Galeries Lafayette, also in Paris, began accepting the system.

Now, NPCI and its partners in Europe are reportedly in advanced stages of discussions to expand the acceptance of UPI to other landmark places visited by Indian tourists, most notably leading global shopping outlets in Paris and other countries in Europe. Sources indicate that a key luxury shopping group, which has outlets in over a dozen countries, in Europe and in the United States, is expected to sign on to UPI in the coming few weeks.

Among other countries, Germany, too, is said to be toying with the idea. As more countries recognise the benefits of UPI, its acceptance is expected to expand further into Europe, Australia and other popular travel destinations.

Seamless shopping experiences

For many travellers the ability to use UPI abroad not only simplifies payment process but also enhance over all experience (Photos: La Vallee Village)

Seamless shopping experiences that significantly enhances their travel experience. Many Indians travelling to foreign countries have faced the challenges of currency conversion, unfamiliar payment systems and the constant need to carry cash. UPI’s global expansion offers a solution to these issues, allowing travellers to use their smartphones for transactions as they would at home.

“For those of us who travel often, this is a game-changer. UPI lets us skip currency hassles, making shopping feel as easy as it does back home. It is reassuring to know I can rely on UPI while exploring new places,” Priya Mehta, a 38-year-old avid traveller tells India Outbound.

For many travellers, the ability to use UPI abroad not only simplifies payment processes but also enhances their overall experience. The fear of running out of local currency or facing high international transaction fees is alleviated, enabling tourists to focus on enjoying their trips. As Waseem Lone, a model and avid traveller, says UPI abroad feels like a piece of home.

“Using UPI abroad feels like having a piece of home with me. I can enjoy my travels without worrying about finding ATMs or converting currency. It truly enhances my shopping experience,” Lone tells India Outbound.

The global acceptance of UPI represents a significant shift in the way Indian tourists interact with foreign markets

As UPI continues to gain acceptance in international markets, Indian professionals abroad are increasingly voicing their excitement over its global expansion. For those living and working overseas, having access to this familiar and convenient payment option means a smoother experience when traveling or making purchases, reducing the hassle of international transaction fees and currency conversions.

“The expansion of UPI beyond India is a hugely positive step, not only for tourists but for Indians like me who work abroad. Being able to make payments as seamlessly as I would back home just simplifies so much. I hope Germany considers accepting UPI in the future as well, it would be incredible to use it here for everyday purchases and while traveling across Europe. UPI has become a lifeline for digital transactions back in India, and it would bring the same ease here,” Nabeel Tawqi, a 30-year-old architect from Dresden in Germany, tells India Outbound.

The global acceptance of UPI represents a significant shift in the way Indian tourists interact with foreign markets. With the ability to pay directly from their bank accounts using their smartphones, shoppers can focus on enjoying their experiences without the stress of managing foreign currency. As more international retailers recognise the potential of UPI and integrate it into their payment systems, Indian travellers can look forward to a more streamlined and enjoyable shopping experience abroad.

Tour operators and the UPI effect

It is not just the travellers who are enthusiastic about UPI’s rising traction around the world. Travel agencies and tour operators in India are also very happy. They say they are observing subtle but significant changes in their clients’ travel choices. The convenience of digital payments has become a growing factor for Indian tourists, especially those looking to avoid the hassle of foreign exchange.

A representative from a prominent travel agency shares insights into how UPI is impacting the travel industry and shaping the preferences of outbound Indian travellers.

“With the acceptance of UPI in more destinations, we are seeing about a 20 pc increase in interest from outbound clients seeking places where UPI payments are accepted. Destinations like Mauritius, France and the UAE are becoming popular due to this ease of transaction. While many of our inbound clients still prefer credit cards. However, it is still a challenge, as UPI acceptance is not yet widespread, so clients need to search for places where it is available. We believe that UPI’s expansion could genuinely reshape travel, making it possible for Indian travellers to skip currency exchanges altogether. It is a welcome move and we hope to see it grow globally,” S Mahalingaiah-Manu, Director, Skyway International Travels, tells India Outbound.

Guru Charan Thatha, representative of Holiday in Time based in Hyderabad emphasises the importance of UPI for his clients.

“Our clients are looking for hassle-free travel experiences, and the introduction of UPI in international markets is a significant step in that direction. For many of our clients, the ability to make payments in the same way they do back home transforms their shopping experience abroad. UPI eliminates the uncertainty of international transaction fees, allowing travellers to focus on enjoying their trips without the added stress of managing their finances,” Thatha tells India Outbound.

This trend is likely to drive more Indian tourists toward destinations that prioritise UPI acceptance, leading to increased foot traffic in retail and hospitality sectors. As UPI continues to gain traction in international markets, tour operators anticipate a surge in Indian travellers exploring luxury shopping destinations worldwide.

“These days, most Indian clients, especially younger travellers, ask if UPI is accepted at their destination even before booking tickets. It really influences where they choose to go. Recently, I had a group of young people who were eager for a seamless experience abroad. As we all know, this generation is all about technology and convenience they don’t want to deal with the hassle of currency exchange or carrying cash. The very first question they asked was, ‘Is UPI accepted there?’ It is clear that having UPI available has become a deciding factor for Indian travellers when planning their trips,” Shishir Tyagi, Manager, Saini Tour and Travels, tells India Outbound.

As more countries adopt UPI, global retailers are recognising the growing demand from Indian tourists for seamless payment solutions. High-end brands and luxury shopping destinations are beginning to integrate UPI into their payment systems, catering to the preferences of their Indian clientele. The growing trend signifies the increasing influence of India’s digital payment ecosystem on a global scale, reaffirming UPI’s position as a key player in the evolving landscape of international finance and tourism.

Looking ahead, UPI’s potential for global acceptance appears promising. The digital payment landscape is evolving, and as more countries recognise the advantages of UPI, Indian travellers can expect to see increased accessibility and convenience during their journeys.

The future of UPI in global tourism looks bright, with the potential for further expansion into new markets and increased acceptance among international retailers and luxury brands and destinations.

As UPI continues to evolve and adapt to the needs of Indian travellers, it will undoubtedly enhance the overall travel experience and facilitate seamless transactions worldwide.