In a significant regulatory shift that affects global digital payments, the National Payments Corporation of India (NPCI) has issued a directive impacting international UPI transactions, particularly those made through the “QR Share & Pay” method. This policy update, outlined in a circular released on April 8, 2025, introduces changes that will affect UPI transactions conducted abroad, starting retroactively from April 4, 2025. The shift aims to improve security and oversight in international financial transactions, especially as the adoption of UPI continues to expand globally.
The new regulation disallows international payments initiated by scanning saved QR codes—those saved in device galleries—via popular UPI payment apps like Google Pay, PhonePe, and Paytm. This means that while QR codes can still be used in real-time at physical merchant locations, transactions made via shared, saved codes will be blocked.
This article explores the key aspects of this update, the impact on users and merchants, and why the NPCI has taken this decision.
Changes in UPI Regulations and the Impact on Global Payments
The new directive from NPCI halts the practice of using the “QR Share & Pay” method for international UPI transactions. This practice had gained popularity among Indian tourists and Non-Resident Indians (NRIs) due to its convenience in making payments remotely. Under this method, a merchant could share a static QR code via digital channels like WhatsApp or email, which a customer could save and scan later to complete the transaction. This offered a flexible solution for making payments across borders, without requiring physical presence at the point of sale.
Now, all international UPI transactions made through shared QR codes will be disallowed, effective immediately. Instead, only live scans at merchant locations are permissible. This shift will have a significant impact on Indian tourists and NRIs who previously relied on the convenience of remote payments.
The ban specifically targets international Person-to-Merchant (P2M) transactions, which are initiated via saved QR codes. However, domestic transactions using QR Share & Pay within India are still allowed, although they are subject to certain limits and merchant verification protocols.
What Undercode Say:
The move by NPCI to discontinue the “QR Share & Pay” method for international UPI transactions can be seen as part of the broader trend of tightening financial regulations, particularly in the digital payments space. While the shift will undeniably disrupt the convenience that many users have come to rely on, the primary driver behind this change appears to be concerns around security and fraud prevention. QR codes, especially those shared remotely, have been identified as vulnerable to tampering, which opens up avenues for fraud and unauthorized transactions.
Security experts have pointed out that remote, shared QR codes can easily be manipulated or misused by malicious actors. This vulnerability is particularly concerning when it comes to international transactions where merchants may not always be verified, and the risk of phishing or other fraudulent schemes is heightened. By eliminating remote QR payments for international transactions, NPCI is taking proactive steps to reduce these risks.
The decision also reflects the growing complexity of managing a payment system like UPI, which has expanded its reach to multiple countries, including France, Singapore, and the UAE. As more users embrace UPI for cross-border payments, ensuring that these transactions are secure and traceable has become a priority. Without physical verification or merchant onboarding, the chances of unauthorized payments and data breaches rise. This policy change will help mitigate those risks and provide more oversight into outbound UPI flows.
For Indian travelers and NRIs, however, this change may prove to be a hassle. Many will have to resort to traditional methods like credit or debit cards for remote payments when abroad. This could be seen as a step backward in terms of the convenience that UPI payments have brought to global transactions. At the same time, it’s important to recognize that this decision is meant to bolster the integrity of India’s payment system and prevent exploitation.
The domestic market remains unaffected, but the continued limits for non-verified merchants will likely ensure that local transactions stay within a controlled, secure environment. The decision also highlights the ongoing evolution of digital payments in India and the fine balance between convenience and security that regulatory bodies must navigate.
Fact Checker Results
- NPCI’s move to ban international QR Share & Pay transactions via saved QR codes aligns with growing concerns over digital payment fraud and security.
- The decision to implement live scanning for cross-border transactions is consistent with industry trends aimed at reducing remote payment fraud.
- The shift will likely cause disruption for Indian tourists and NRIs, though it aims to protect both consumers and merchants from security threats.
References:
Reported By: timesofindia.indiatimes.com
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