Cross-Border UPI: “Legal, Compliance, And Settlement Framework For International Expansion”
- IJLLR Journal
- Feb 24
- 2 min read
Anbumukil. S, Elavarasan. P & Ellakiya. S
ABSTRACT
The globalisation of India’s Unified Payments Interface (UPI) represents a pioneering attempt to extend an instant, low-cost, account-to-account retail payment infrastructure across jurisdictions with varied regulatory, technological, and monetary frameworks. This paper critically examines the legal, compliance, and settlement architecture required for the international deployment of cross-border UPI corridors. It begins by evaluating the divergent regulatory regimes applicable to UPI operations abroad, analysing how RBI and NPCI/NIPL guidelines interface with licensing, supervision, and risk-management expectations of foreign central banks and payment regulators. A core focus is the integration of robust AML/CFT, KYC, and sanctions-compliance mechanisms that align with FATF recommendations while preserving the speed, finality, and frictionless user experience characteristic of UPI. The paper then explores the complex terrain of data governance in cross-border transactions, particularly the interaction between India’s data protection regime and international frameworks such as GDPR, with emphasis on localization norms, consent requirements, and cybersecurity liability. Settlement design including clearing models, FX conversion processes, liquidity management, and legal recognition of settlement finality is analysed to assess how UPI could support scalable, resilient, and interoperable cross-border payment flows. Technical-legal standards such as ISO 20022, open APIs, and alias-based identifiers are examined for their role in ensuring interoperability, dispute management, and system integrity across heterogeneous payment ecosystems. The paper further investigates taxation, exchange-control compliance, consumer protection risks, liability allocation, and governance structures underpinning multi-jurisdictional partnerships. Finally, it situates UPI’s global expansion within the broader G20/BIS agenda on faster, cheaper, and more transparent cross-border payments, highlighting implications for remittances, financial inclusion, regional integration, and India’s fintech diplomacy. Collectively, the study offers a comprehensive framework for a legally sound and internationally scalable cross-border UPI ecosystem.
Keywords: Unified Payments Interface (UPI); FATF recommendations; cross-border transactions; Settlement design; interoperability; fintech diplomacy.
