The Indian mobile payment system UPI, a soft power tool

From the Eiffel Tower to Mauritius, via Sri Lanka, Nepal, Bhutan and the United Arab Emirates, the mobile payment system developed by India is exported throughout the world. Since January 26, Indian tourists can buy their tickets for the Eiffel Tower through Unified Payments Interface (UPI), the Indian mobile payment system, simply by scanning a QR code, recognized by their usual payment application. A service developed with the French specialist Lyra, itself present in India for seventeen years.

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“A million Indians visit France every year, and their number is increasing by 20% to 30% per year”says Christophe Mariette, commercial director of Lyra. “UPI’s target is major monuments, hotels, transport, traders…” Launched in 2016 by the nationalist government, this technology has revolutionized mobile payment in India, a country nevertheless addicted to cash. Indians use it to pay for their online purchases, but also to pay for their vegetables from street vendors or buy their cigarettes individually for around ten rupees, the equivalent of a few euro cents.

“UPI technology has been widely adopted by Indian consumers. In December 2023 alone, some 12 billion transactions were recorded: the system is mainly used for small amounts., underlines Satish Meena, analyst at Datum Intelligence. Over the whole of 2023, the number of transactions carried out using this technology has exceeded 100 billion, for a value of 2,000 billion euros.

System developed in open source

The architecture of this system, developed in open source by the government, is used by third-party applications such as Google Pay, Amazon Pay and PhonePe. She connects more than 500 banks and allows instant payments and bank transfers through mobile applications. “Unlike other systems, this is not an electronic payment wallet, but rather immediate transfers from bank account to bank account, via applications that use the UPI architecture”insists Satish Meena.

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The service is completely free for users. “In a low-income country like India, the mobile payment penetration rate, with huge volumes at low cost, can be considered one of the great achievements of this government”, estimates Hemindra Hazari, independent analyst based in Bombay. The government of Prime Minister Narendra Modi is also trying to use it as a diplomatic and soft power tool, particularly in the countries of the Global South. The nationalist leader thus announced, on February 12, the launch of UPI for Indian tourists in Sri Lanka and Mauritius.

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