2 weeks Ago
For years, Indians abroad had grown accustomed to scanning UPI QR codes with the same ease as in Mumbai or Delhi. But in a sudden and unexpected move, the NPCI announced in January 2025 that QR-based UPI transactions deployed outside India would cease. The news sent shockwaves among travelers and merchants, who were caught off guard by the abrupt change.
Notably, the NPCI didn't make a public announcement about this development; instead, it was communicated through a technical circular to banks. The lack of transparency and phased rollout led to confusion, with the effectiveness of the change fluctuating wildly. Behind this seismic shift lies a complex interplay of security concerns, foreign currency regulations, and a surprising reorientation of India's digital payment strategy.
Why This Sudden Move? UPI QR codes were never designed to internationalise. An audit by the Reserve Bank of India (RBI) in 2025 found: 78% of failed overseas UPI transactions were due to problematic currency conversions. Dynamic forex rates caused disputes, like paying ₹850 for coffee when its actual cost was ₹720.
Very few small merchants outside were equipped with systems to reconcile the tax calculations of the local currency with those of INR. Interpol's financial crime report for the year 2024 showed that QR code scams targeting Indian travelers increased by 300%. Some tactics used included Fake merchant QR stickers are put on valid terminals.
There were middleman attacks that interrupted payment in currency-neutral zones. Tricking travelers into scanning codes that emptied their wallets. By the late 2024s, provisions of the Foreign Exchange Management Act (FEMA) had been amended to incorporate: We provide real-time cross-border digital transaction reporting.
Overseas merchant onboarding with stricter KYC (almost impossible for small foreign shops). NPCI became liable for transaction reversal, which is a liability it could not shoulder from a global standpoint. Who Are the Most Affected? Tourists: inconvenience in foreign shops/restaurants while using UPI QR payments Students: abroad depend on wire transfers or forex cards for rent.
NRI: Missed the Simple Way of Sending Money to Families Through Merchant QR Foreign Businesses: Are Indian customers now resorting to cash because the KHDA Dubai Gold Souk has recorded a 45% drop in sales? What Works Now? Payment Alternatives ICICI Bank (Singapore), HDFC Bank (UAE), and SBI (France) appear to continue working with countries such as Singapore, the UAE, and France. How it works: Enter international bank account details on UPIMobile. Remit via IFSC/SWIFT, which would take around 2-3 hours.
Charges to expect range from 0.5% to 1.5%, which are lower than those for traditional wires.
This feature is expected to launch in late 2025, and it will: Facilitate the loading of pre-trip forex via UPI (similar to a digital wallet ). Engage biometric authentication for QR payments abroad. Cap the spending at the equivalent of USD 500 for one day.
Niyo Global Card: Zero forex markup + ATM withdrawals Paytm Forex Card: Reload through UPI; book exchange rates Wise Multi-Currency Account: Hold 50+ currencies. The Human Impact: Stories from the Ground "I stood with embarrassment at a night market," said the vendor, "as he told me that my payment of ₹200 for mango sticky rice did not come through.They assumed I was scamming him-I had to leave my phone as collateral while searching for an ATM.
" "My landlord couldn't take wires, and UPI QR was my mode of paying rent. Now, I feel like the year 2010, lugging cash everywhere." Blocking UPI QR codes is not just a technical failure; it represents a shift in financial culture.
While people may feel frustrated by this situation, the limitations of UPI QR codes are steering India toward a safer and more regulated payments environment on a global scale. Here’s what you need to know about it. Recommendations: Before using: Load your card or activate UPI International.
For NRIs: Use banking apps like SBI NRI for instant transfers. For businesses: Consider adding PayPal or local payment alternatives for Indian customers. Another round of digital payments is coming at this stage.
As NPCI works out solutions, perhaps travelers should weigh convenience against compliance because the history of scanning your way around the globe has come to a temporary halt..
