The National Payments Corporation of India (NPCI), which manages UPI (Unified Payments Interface) transactions in India, has announced a significant change in the way international UPI payments will function. Starting April 30, 2025, the NPCI will prohibit QR Share and Pay for Person-to-Merchant (P2M) transactions. This new regulation means that international UPI users will no longer be able to scan and save QR codes for future payments when making purchases from foreign merchants.

What Does This Change Mean for International UPI Users?

Under the new directive, international UPI users will not be able to use saved QR codes to make payments to foreign merchants. For example, if a user scans a QR code in another country while purchasing a product, saves it to their phone, and tries to use it later for payment, the transaction will fail. QR Share and Pay for P2M transactions will be disabled, making it impossible to complete payments in this way.

However, there’s some good news: International users will still be able to scan physical QR codes directly at the merchant’s location when making payments in person. This means that while the ability to save and reuse QR codes for future payments is restricted, in-person transactions are unaffected.

This restriction applies only to international transactions and does not affect domestic QR Share and Pay transactions. For domestic transactions, users can still continue making payments using shared QR codes, and the existing transaction limits remain the same.

Why Has NPCI Implemented This Change?

While NPCI has not provided specific details regarding the reason behind this change, industry experts speculate that it is a response to the growing incidence of scams involving international transactions. These scams are often perpetrated by individuals located outside India, who target unsuspecting users by exploiting the QR share and pay system. By halting this feature for international payments, the NPCI aims to reduce the potential for fraud and protect Indian consumers from financial exploitation.

This initiative could be part of a broader effort by the NPCI to ensure greater security and integrity in UPI transactions, particularly when it comes to international payments. As scams have become increasingly sophisticated, NPCI’s decision might be seen as a proactive step to safeguard consumers from fraudulent activities.

Impact on International UPI Usage

At present, India’s UPI-based payments are accepted in several countries, including France, Mauritius, Nepal, Singapore, Sri Lanka, UAE, and others. These countries use Bharat QR for UPI-based transactions, allowing Indians traveling or residing abroad to make payments via their UPI apps, such as Google Pay, PhonePe, and Paytm. Despite this new restriction, physical QR code payments will still be allowed in these countries, enabling Indian users to continue using UPI for in-person transactions.

However, the QR Share and Pay system, which previously allowed users to scan and store merchant QR codes for future use, will be rendered inactive for international transactions. This change is unlikely to affect users who only make domestic UPI transactions, as the feature remains functional within India.

Domestic UPI Payments and Transaction Limits

There is no change to domestic transaction limits in India. UPI users can still use the QR Share and Pay system for domestic payments, with a limit of Rs 2,000 for payments made to non-verified offline merchants. This ensures that small transactions can still be processed smoothly while maintaining security measures.

Conclusion

In conclusion, NPCI’s new directive regarding international UPI payments will prevent the use of shared QR codes for P2M transactions starting April 30, 2025. While this change will affect international users’ ability to save and reuse QR codes for future transactions, they can still make in-person payments by scanning physical QR codes at merchant locations.

The move comes in response to the rise of fraudulent activities targeting Indian consumers through international transactions. While the specifics of the decision have not been made clear by NPCI, it is widely seen as a measure to curb scams and enhance security.

As UPI-based payments continue to expand globally, these new restrictions are likely to shape the future of how Indians make payments internationally, with a focus on safety and fraud prevention.

The Upcoming IPOs in this week and coming weeks are Aten Papers & Foam.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.