Can UPI Be India’s Answer to SWIFT Banking System

India, which received the highest remittances last year, can not afford to rely on the SWIFT banking system. Can UPI then be the knight in shining armour for India?
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Recently, Oman and India signed a memorandum of understanding (MoU) to launch India’s RuPay card and the Unified Payment Interface (UPI) platform – the Indian indigenous system of electronic payment – in Oman. A similar agreement was inked between the UK and Indian governments, where payments solutions provider PayXpert partnered with UPI to internationalise the acceptance of its payment solutions in the UK. 

In a similar vein, over a dozen nations have joined hands with the NPCI International Payments Limited (NIPL), a fully-owned subsidiary of National Payments Corporation of India (NPCI), to adopt UPI, the biggest real-time payment solution in the world.

(Countries that have either adopted or are in the process of adopting UPI)

The rising influence of UPI in India

Back then, nobody could have predicted that UPI, introduced in 2016, would go on to become the face of the Indian financial revolution. Early on, only 6% of all payments in India were made through UPI, compared to 36% card payments. However, UPI’s share increased to 63% in FY 2021 while card payments were relegated to a single-digit share of 9%.

In India, UPI-backed real-time payments have resulted in incremental cost savings of $12.6 billion in 2021, according to a report. UPI alone has contributed to India’s economy, adding $16.4 billion, or 0.56% to its GDP. As per projections, UPI payments are set to increase India’s GDP by $45.6 billion, or 1.12%, by 2026.

Why NPCI wants to go international?

Owing to the ongoing Russia-Ukraine conflict, in the past month, a few Russian banks were removed from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a financial system that enables seamless and speedy transmission of money across borders. Following such action by the European Union and the United States, Russian banks lost access to quick and easy transactions offered by SWIFT, causing payments for its agricultural and energy exports to be disrupted. Now that banks had to communicate directly with one another, there were delays and additional expenses, which ultimately impacted the Russian government’s finances. According to estimates, the Russian economy is thought to have lost 10-15% of its GDP due to the SWIFT ban. The embargo also targeted $630 billion in Russian foreign exchange reserves. 

Meanwhile, India receives more remittances than any other country in the world. In 2021 alone, the country received more than $87 billion in remittances. So, if in future, India is excluded from the SWIFT network, it would heavily impact Indians sending money back home. 

To rule out any such future curbs, and building on its good geopolitical relations, it would be beneficial for India’s financial freedom and security to take UPI internationally. UPI could be that “one” product from India that can be the source of India’s behemoth profits in the future. The fintech platform is so well developed that even Google had recommended the USA government to implement it in the country. 


Normally, it costs people $13 to send $200 back home. UPI, however, charges zero transaction fee, which is why NPCI International Payments CEO Ritesh Shukla believes that “the remittances market is ripe for disruption”.

As of now, UPI does not charge any transaction fee, while SWIFT generally charges banks a yearly fee of 2-5% which the latter then transfer on to the users. So, while SWIFT may be secure and reliable, it’s not cost effective. 

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Lokesh Choudhary
Tech-savvy storyteller with a knack for uncovering AI's hidden gems and dodging its potential pitfalls. 'Navigating the world of tech', one story at a time. You can reach me at:

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