India-UK Free Trade Agreement To Boost UPI Expansion In Britain

As part of the recently inked India-UK (Free Trade Agreement) FTA, both countries have agreed on allowing access to their respective fast payment systems, enabling fast-paced money transfers and QR code payments.  

This would allow international travellers to make paymenets using their UPI accounts instead of relying on pound sterling. Likewise, the UK citizens will be able to now transfer cash online to their family members back in India.

This provision was mentioned in the ANNEX 9A under the Comprehensive Economic and Trade Partnership Agreement (CETA), inked on July 24, between India and the U.K. under the “Schedules of Specific Commitments on Financial Services”

It reads,"Access to respective Fast Payment Systems (FPS) on a reciprocal basis, without a need to get onboarded onto the other payment system, through interlinking of FPS for: (i) QR code-based merchant payments, and (ii) instant fund transfers."

Also Read: Maruti Suzuki’s New SUV Set To Challenge Hyundai Creta

This access is applicable for cross-border payments, consumption abroad, for entities with commercial presence as well as for any natural persons residing in either the UK or India.

The  UPI accessibility linked provision is expected to enhance cross-border digital transactions, enabling users in India and the UK to make real-time payments to merchants and transfer funds internationally.

In 2022, NPCI International Payments Limited (NIPL), had inked a signed a memorandum of understanding (MoU) to make India-based payment solutions available in the UK on all PayXpert’s Android point-of-sale (POS) devices for in-store payments, begining with UPI-based QR code payments and later integrating the possibility for RuPay card payments.

However, the arrangement brokered through the FTA is different as well as broader in all aspects. 

India has similar agreements with the UAE and Singapore to enable such payments and remittances. These are countries with a large Indian diaspora and voluminous money transfers every year.

To be sure, merchant outlets in the UK have terminals that accept card payments more than QR-based real-time payment systems, which could restrict the possibility of widespread usage of UPI.