UPSC Prelims 2025 Q69: UPI Merchant Payments Abroad — Explained

Consider the following countries:

I. United Arab Emirates

II. France

III. Germany

IV. Singapore

V. Bangladesh

How many countries amongst the above are there other than India where international merchant payments are accepted under UPI?

Only two
Only three
Only four
All the five

Answer: (b) Only three

Statement-wise explanation

I: correct — Indian visitors can pay shops in the UAE with their Indian UPI apps by scanning a QR code. NPCI International (NIPL) enabled this through tie-ups with UAE acquirers such as Mashreq Bank's NEOPAY. Government lists of countries where UPI is accepted at foreign merchants always include the UAE.
II: correct — UPI was formally launched in France at the Eiffel Tower on 2 February 2024. Indian tourists can buy tickets there by scanning a QR code and paying in rupees. This made France the first European country to accept UPI. The link runs through NIPL's partnership with the French payments firm Lyra.
III: incorrect — Germany is not on any official list of countries where Indian UPI apps work at merchants. India and Germany have discussed digital-payments cooperation. Discussion is not a live merchant-acceptance arrangement, and that is what the question asks about.
IV: correct — Singapore has two separate UPI links. Since February 2023 the UPI–PayNow linkage has allowed instant person-to-person transfers between the two countries. Separately, Indian UPI apps can pay at Singapore merchants that accept UPI QR codes. The Finance Ministry's lists of live foreign-merchant acceptance include Singapore.
V: incorrect — Bangladesh did not have live UPI merchant acceptance. It is missing from the government's list of countries where UPI apps work at foreign merchants: Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, the UAE and later Qatar. The February 2024 launch was of UPI in Sri Lanka and Mauritius, plus RuPay cards in Mauritius. Bangladesh was not part of it.

How to eliminate

Elimination helps only a little here. You have to know which countries actually accept UPI. France is the easiest to confirm, because the Eiffel Tower launch in February 2024 was widely reported. The UAE is a safe pick too, since it has a large Indian diaspora and was one of the first countries to accept UPI. Together these two rule out nothing yet, but they show the answer is at least 'two'. Germany is the obvious outlier. UPI's European entry was through France, and no German launch was ever announced, so 'all five' goes. That leaves Singapore and Bangladesh. Many candidates confuse the neighbourhood launch of February 2024 (Sri Lanka and Mauritius) with Bangladesh. Singapore, on the other hand, has been linked to UPI through PayNow since 2023. Fact to remember: the core list of countries with UPI merchant acceptance is Bhutan, Nepal, Sri Lanka, Mauritius, the UAE, Singapore, France and Qatar. Bangladesh and Germany are not on it.

Know more

How UPI goes abroad

UPI was launched by the National Payments Corporation of India (NPCI) in 2016, under RBI oversight. In 2020 NPCI set up a subsidiary, NPCI International Payments Ltd (NIPL), to take UPI and RuPay overseas. It does this in three ways:

Model	What it allows	Examples
Merchant acceptance (QR)	An Indian tourist scans a local QR code with an Indian UPI app and pays from their Indian bank account	UAE, France, Singapore, Bhutan, Nepal, Sri Lanka, Mauritius, Qatar
Fast-payment system linkage	Instant person-to-person transfers between two national systems	Singapore (UPI–PayNow, Feb 2023)
Building a UPI-like system	India helps another country build its own real-time payment system	Namibia, Peru (NIPL agreements with central banks)

Key milestones

UAE: one of the first countries with merchant acceptance, through NEOPAY (Mashreq Bank).
Singapore: UPI–PayNow went live on 21 February 2023. It was the first linkage of this kind.
France: Eiffel Tower launch, 2 February 2024. It was the first in Europe.
Sri Lanka and Mauritius: UPI launched on 12 February 2024. Mauritius also got RuPay card services.
Later: UPI acceptance through Qatar National Bank. After the exam, UPI expanded to Cambodia, Greece and the Maldives.

Watch the wording. 'Merchant payments accepted' means paying at shops abroad. It is different from remittance linkages (P2P transfers), from agreements to build a UPI-like system, and from MoUs on Digital Public Infrastructure. UPSC often lists countries from the second and third groups as decoys.

In the news

UPI's spread abroad was a major news story in 2024. The Eiffel Tower launch in France came in February 2024, as did the launch in Sri Lanka and Mauritius. Ministers kept citing the number of countries where UPI is live. UPSC tested whether candidates could tell actual merchant acceptance apart from countries that were only in talks or never connected.

NCERT Concepts to Revise

Unified Payments Interface: The question is about where this real-time, interoperable payment system is accepted at merchants outside India.
Digital public infrastructure: UPI is India's flagship payments DPI. DPI-sharing MoUs with many countries are a common decoy for live UPI acceptance.
Digital payments: Merchant acceptance abroad is a cross-border digital payment: money moves from an Indian bank account to a foreign merchant.