India: more than 100 billion transactions realised through payment system UPI in 2023: India's three-way payment matchmaking

According to a 3 March report on the website of the French newspaper Le Monde, India's mobile payment system is expanding globally, with footprints in the Eiffel Tower, Mauritius, Sri Lanka, Nepal, Bhutan and the United Arab Emirates. Since 26 January this year, Indian tourists have been able to buy tickets for the Eiffel Tower through the Unified Payment Interface (UPI) app, simply by scanning a QR code. The service was developed by Lyra, a French company that has been operating in India for 17 years.

Christopher Marye, Sales Director, Lyra, said, "Currently, more than a million Indians visit France every year, with an annual growth rate of 20% to 30%.The UPI app targets locations such as tourist attractions, hotels, transport and businesses."

Since the launch of UPI by the Indian government in 2016, this technology has revolutionised the mobile payment market in India. Indians use this system to shop online, go shopping, and even buy vegetables or cigarettes from street vendors.

Satish Meena, an analyst at Data Analytics India, noted, "UPI technology has been widely adopted by Indian consumers. In December 2023 alone, 12 billion UPI transactions took place, most of which were small transactions." Throughout 2023, more than $100bn was transacted through UPI, with a transaction volume of ₹200bn.

The system, developed by the government as an open source project, can be used in third-party payment systems such as Google and Amazon.The UPI system connects more than 500 banks and allows payments and real-time bank transfers through mobile apps.

Meena explains, "Unlike other systems, this is not an e-wallet, but an instant transfer tool between bank accounts."

The UPI service is completely free. Hemindra Hazari, an independent analyst from Mumbai, said, "In low income countries like India, low transaction costs and high transaction volumes have increased the penetration of mobile payments, which can be seen as a major success for the government."

The Indian government is also trying to use this payment system as a tool of diplomacy and soft power, especially in the Global South.On 12 February, Prime Minister Narendra Modi announced the launch of UPI services in Sri Lanka and Mauritius for Indian tourists.

Earlier, UPI had signed agreements with Singapore, United Arab Emirates, Bhutan and Thailand. Indian labourers in Singapore and the UAE will be able to connect to UPI through local mobile payment systems to transfer funds back to India.

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