Insights
UPI’s next export must be trust, not just technology
August 10, 2026As a country, India is no stranger to creating effective and cost-effective public infrastructure adopted at scale, which has then become a global benchmark. In the current day, it is appropriate that India’s digital payments story is no longer only a domestic success story. It is increasingly a case study in how public digital infrastructure, regulated private innovation, bank participation and disciplined supervision can create population-scale financial services infrastructure. With the UPI’s evolution from a domestic payments system to an international reference point, there is also a change in the regulatory perspective: will India export trusted financial services while preserving privacy, regulatory oversight, cyber resilience and digital sovereignty?
The challenge is whether India has to treat governance as part of the product. In this regard, India does start from a position of strength. UPI’s success lies in the fact that it was not built merely as a consumer application, but as an interoperable network. Banks, payment service providers, point of sale system providers, merchants, settlement systems and regulators each perform defined roles to enable this network.
Further, government incentives for low-value BHIM-UPI transactions have helped expand adoption, particularly among small merchants- who form an important part of the real last-mile adoption. Importantly, the recent change in policy where incentive design does not reward volume alone but is also linked to high system uptime and low technical decline rates is a move in the right direction. A payments ecosystem that seeks global relevance must be measured not only by adoption, but by reliable availability.
The Reserve Bank of India’s role in this journey deserves particular attention. RBI has acted neither as a passive observer of market-led innovation nor as an overbearing regulator that prevents experimentation. RBI’s contribution has been more measured: enabling new payment models, insisting on interoperability, preserving the role of regulated participants, strengthening consumer protection and maintaining systemic oversight. That institutional discipline is another reason India’s payments infrastructure can credibly travel beyond India.
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This matters because payments are not ordinary technology services. Payments data can reveal identity, location, counterparties, purchasing behaviour, economic relationships and patterns of financial activity.
A payment failure is rarely just a technology failure. It can become a consumer protection issue, a fraud event, a cyber incident, a foreign exchange concern or, at scale, a systemic stability issue. Foreign partners assessing Indian payment capabilities will not only focus on the cost and efficiency- but also determine issues of supervision, data protection and cyber security controls, enforceable dispute resolution, etc.
Therefore, as India moves to take the UPI outside, it is critical to focus on trusted payment corridors, i.e., mirror the interoperable network internationally. Cross-border payment partnerships require more than technical integration. They need regulator-to-regulator cooperation, clear allocation of liability, dispute resolution standards, fraud intelligence sharing, anti-money laundering controls, foreign exchange compliance, cyber incident protocols, and clarity on what data may be accessed, stored or shared by each participant.
This creates a requirement for cyber resilience to be at the centre of this approach. Exporting payment services is not only exporting technology or user interfaces. It requires dependable, supervised and resilient operations. Participants should have to maintain strong vendor governance, outsourcing controls, incident response testing, business continuity planning, fraud-monitoring controls, and clear access and audit rights.
Privacy must also be built into payment design. The Digital Personal Data Protection framework creates a horizontal baseline for personal data processing, but payments require sector-specific operationalisation given the scale. Notices must be intelligible. Consent, where required, should not be buried in opaque user journeys. Data minimisation should apply across merchants, apps, processors, analytics providers and fraud vendors. Users should have clear channels for correction, grievance and redress.
Separately, India has to take into account AI adoption in the UPI ecosystem, where it is pertinent that institutions should not treat efficiency as the only objective. Efficient provision of services is essential, but it should be supported by auditability, proportionality, human escalation for contested outcomes, and controls against bias, excessive profiling, etc. A payment system that is secure but opaque may not be built for durable trust.
For enterprises, this means effective enforcement of existing laws and regulatory directions- which are diverse and create a mature governance framework focused on payment systems regulation, anti-money laundering monitoring, consumer protection, cyber security obligations and outsourcing controls. The priority should be practical guidance, consistent enforcement, and supervisory follow-through. For cross-border payments, credibility will come not from having more rules, but from demonstrating that existing rules are applied predictably by the adjudicators.
None of the above discussion comes from the point of view that India is on the back foot. In fact, focusing on digital sovereignty should not mean we are focused on being digitally isolated. A well-developed digital sovereignty model allows data to support global commerce while ensuring that Indian regulators can supervise Indian risks, Indian users can have undisrupted access and enforce their rights, and relevant institutions remain accountable.
India’s payments success has often been described as a triumph of scale. Its next achievement should be a triumph of governance. If India can combine UPI’s interoperability, RBI’s measured supervision, credible cyber resilience, privacy-by-design and effective enforcement, it can export more than a payment interface. It can export a model of regulated digital finance that is low-cost, inclusive and trustworthy. Cross-border payment innovation will succeed only if each stakeholder in the system, finds the system reliable and trustworthy.
India has already showcased the population-scale adoption of UPI, now it has to showcase its ability to develop jurisdiction-scale trust.
This article was originally published in Financial Express on 10 August 2026 Co-written by: Shahana Chatterji, Partner; Kirti Mahapatra, Partner. Click here for original article
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Disclaimer
This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm.
Kirti Mahapatra
Partner