In a significant move, Sri Lanka has opened its doors to India’s Unified Payments Interface (UPI), allowing seamless digital payments between the two nations. The announcement was made during the visit of Sri Lankan President Ranil Wickremesinghe to New Delhi. This latest development strengthens the economic ties between India and Sri Lanka, fostering greater convenience for businesses and tourists alike. It comes as a part of India’s initiative to promote UPI adoption globally, as evidenced by Prime Minister Narendra Modi’s recent statement about Indian tourists being able to utilize the digital payments facility in France. The expansion of UPI beyond national borders marks a notable step towards a more interconnected and digitally empowered world.
UPI in Sri Lanka
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After France, India is bringing Sri Lanka its own domestic digital payment system, the Unified Payments Interface (UPI). In a joint press conference with Sri Lankan President Ranil Wickremesinghe on Friday, 21 July, Prime Minister Narendra Modi said that the two neighbors have reached a deal about the acceptance of UPI in the island country.
Wickremesinghe is in India for the first time as president of Sri Lanka. Having assumed that position in July of last year. The Indian prime minister stated that “the agreement signed to launch Unified Payments Interface in Sri Lanka will boost fintech connectivity.”
The president of the island nation also expressed his gratitude to Modi for India’s assistance during Sri Lanka’s worst economic crisis. Through numerous credit lines and currency support, New Delhi gave $4 billion in financial support.
Speaking to the diaspora last week in Paris, Modi announced that India and France had decided to establish UPI in the European nation, opening the door for Indian tourists to use the online payment system.
The global expansion of UPI
India intends to take its local UPI success abroad. The agreement was struck by Lyra, France’s online payment system, and National Payments Corporation Of India (NPCI). The company that developed UPI, to allow Unified Payments Interface and Rupay Card in the European country.
Business Today reported that NIPL, the international division of NPCI, has been striving to assist other nations in creating payment ecosystems, including Person-to-Person (P2P), Person-to-Merchant (P2M), and cross-border payments.
Bhutan was the first country to introduce BHIM UPI, the Indian government’s digital payment platform, in July 2021. The same year, Malaysia’s Merchantrade Asia worked with NPCI International to enable real-time remittances to India via UPI. Nepal became the first foreign nation to use UPI for digital transactions in March.
India connected UPI to Singapore’s PayNow payment system earlier this year to facilitate quicker remittances between the two nations. This will make it easier for citizens in both nations to send money to one another in real-time. To enable the Indian diaspora to use UPI for online payments, India and Mashreq Bank of the UAE struck a contract. Notably, after the United States, the UAE is the second-largest supplier of remittances to India.
How to use India’s Unified Payments Interface?
UPI is a fast and popular cashless payment method in India. It allows users to make real-time transactions using QR codes or PINs. It has gained widespread acceptance and is projected to reach one billion daily transactions by 2026-27. That comprises around 90% of total retail digital payments in the country.
In May, Unified Payments Interface recorded a record 9.41 billion transactions, amounting to Rs 14.3 trillion in value. The system’s convenience and efficiency are driving more users to opt for quick and seamless cashless transactions. It makes it the dominant choice for non-cash payments in India.
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