(Commonwealth_Europe) India and the United Kingdom have taken a significant step toward transforming cross-border digital payments through a recently signed free trade agreement (FTA). Among its many provisions, one breakthrough feature stands out: the interlinking of each country’s fast payment systems. This will allow users in both nations to make real-time transactions using their native digital platforms—most notably, India’s Unified Payments Interface (UPI).
What this means in everyday terms is that Indians visiting the UK will be able to pay at stores directly through UPI on their phones, without needing to exchange currency or carry British pounds. Likewise, people in the UK can use their own banking or payment apps to send money directly to family or friends in India in real-time, with minimal friction.
The provision, part of Annex 9A of the Comprehensive Economic and Trade Agreement signed on July 24, enables individuals and businesses in both countries to send and receive money quickly using QR codes or direct transfers, without the need to sign up for a new payment platform in the other country.
According to fintech expert Nitesh Singhal, who previously led UPI operations at Axis Bank, this move could be a game-changer. “It significantly improves user convenience, lowers transaction costs, and facilitates faster trade and remittance flows,” he said. Singhal believes this initiative reflects India’s broader push to connect UPI with similar fast payment systems across the globe, such as Singapore’s PayNow and the UAE’s AANI.
It’s a timely step, especially since the UK is India’s third-largest source of remittances. In 2023–24, the UK’s share of money sent to India rose sharply to nearly 11%, up from just 3% in 2016–17. The new arrangement could further streamline that flow, making it faster and cheaper for families to support each other across borders.
Tourism might also benefit. The British government estimates that nearly 18.8 million Indians visited the UK in 2024, spending over $28 billion. If travelers can use their phones to pay for everything from meals to transport, it removes a major layer of hassle and expense.
While the FTA has been signed, the payment integration itself will take time to implement. The UK’s ratification process could stretch over the next year, and both governments still need to work out technical and regulatory details. For example, the Indian government has not yet had formal discussions with the central bank or the National Payments Corporation of India (NPCI), which runs UPI.
Still, some groundwork has already been laid. In 2022, NPCI’s international arm signed a memorandum of understanding to enable UPI-based QR code payments in the UK through PayXpert’s point-of-sale devices. That earlier effort was limited in scope. The new FTA-backed arrangement, by contrast, aims for a more comprehensive and reciprocal system.
However, there are practical challenges to full adoption, particularly in the UK, where card-based payments are more prevalent than QR-based systems. It could take a few years before UPI becomes widely accepted in British shops and restaurants, a senior banking official noted. Even so, the direction is clear: more countries are interested in developing or linking with UPI-like platforms to enable smoother international transactions.
India’s ambition to push digital payments globally gained momentum during its 2023 G20 presidency, where financial inclusion and digital public infrastructure were key agenda items. The interlinking of fast payment systems is a natural extension of that mission. Whether it’s sending money home, making a purchase abroad, or paying bills across borders, the world is getting closer to a time when all that happens as quickly and easily as sending a text.
