India is advocating for reduced compliance requirements for cross-border transactions made through its homegrown Unified Payment Interface (UPI), a system launched in 2016 that now dominates the country’s digital payments sector. Government officials raised concerns at a Financial Action Task Force (FATF) conference in Mumbai, Maharashtra, highlighting how existing global anti-money laundering regulations favor established networks like Visa, Mastercard, and SWIFT.
India is advocating for reduced compliance requirements for cross-border transactions processed via its Unified Payment Interface (UPI), a homegrown digital payment system launched in 2016 by the National Payments Corporation of India (NPCI). UPI has rapidly grown to dominate domestic retail payments, accounting for 83% of India’s digital payments volume in 2024, up from 34% in 2019.
Indian officials presented their case at a Financial Action Task Force (FATF) conference in Mumbai this week, arguing that current global anti-money laundering rules disproportionately favor established networks such as Visa, Mastercard, and SWIFT. The FATF, a global financial watchdog, sets international standards to prevent money laundering and terrorist financing.
The Indian government aims to expand UPI’s presence in international markets, particularly for Indian travelers abroad. However, officials say that smaller cross-border payments made through UPI face stricter compliance requirements compared to transactions processed by Visa, Mastercard, and SWIFT.
Government representatives urged the FATF to make its “travel rule” technology-neutral, allowing digital payment networks like UPI to operate under more equitable regulations. The travel rule mandates financial institutions to collect and transmit sender and receiver details for cross-border payments. A public consultation on potential changes to this rule is open until April 18, and any final decision will require consensus among FATF member countries.
India has already secured agreements with seven countries, including France and Singapore, allowing merchants in these nations to accept UPI transactions. The government hopes that easing regulatory constraints will further accelerate its global adoption.
Neither FATF nor India’s central bank and finance ministry have officially commented on the proposal. Similarly, Visa and Mastercard have not responded to requests for statements.
