While some may associate Alipay with China’s tremendously popular super app, its sister platform, Alipay+, is a merchant gateway with a rapidly expanding international reach.
As one of Ant International’s merchant platforms, Alipay+ played a crucial role in facilitating more than two billion cross-border payments last year, many of them originating in fast-growing markets like Southeast Asia, South Asia, the Middle East, and Latin America.
Altogether, Alipay+ connects to over 150 million merchants across more than 100 markets. That scale makes it is a significant development that India is considering linking its Unified Payments Interface (UPI) to the network. As the predominant real-time payments system in the world, UPI handles nearly half of global digital transactions.
Building on Dominance
Integrating with Alipay+ would make it easier for UPI’s roughly 400 million users to access instant payments while traveling abroad. This could significantly reduce the costs and settlement frictions that are commonplace in cross-border payments, while also helping keep users within the UPI ecosystem.
As UPI has become the most dominant real-time payments platform in the region, the Reserve Bank of India has aggressively looked for ways to expand the system. These efforts include raising transaction limits to enable higher-value purchases and linking the system to a credit card facilitated by Google Pay.
The Inevitable Expansion
Amid this growth, expansion beyond India’s borders seemed inevitable. Last year, UPI teamed with PayPal World, the fintech’s cross-border payments platform, in a deal that also included Alipay rival WeChat Pay.
However, one of the most intriguing developments for UPI has blossomed from the deepening relationship between India and the European Union. After a successful pilot, the European Central Bank announced plans to move forward with connecting its TARGET Instant Payment Settlement (TIPS) service to UPI.
Even more impactful is the newly established Free Trade Agreement between the EU and India. A central pillar of this landmark agreement is the creation of interoperability between the payments infrastructures of the two economies.
Taken together, these initiatives have transformed UPI from a purely domestic digital payments system into a significant cross-border payments player, with the potential to reshape what has long been a complex and inefficient process.
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