📘 IAS Prelims 2025 — GS-III | Q.69 | Classroom Explanation

(Economics: Digital Payments & FinTech)

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📌 Question

Q.69) 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?

(a) Only two
(b) Only three
(c) Only four
(d) All the five

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✅ Correct Answer: (b) Only three

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🧑‍🏫 Classroom Explanation

This question tests current affairs + precise country mapping related to India’s digital payment diplomacy, a rising UPSC focus area.

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🔍 Core Concept: UPI Internationalisation

• UPI (Unified Payments Interface) is India’s instant real-time payment system developed by National Payments Corporation of India (NPCI).
• International expansion happens in two distinct ways:
  1. Person-to-Person (P2P) remittances
  2. Person-to-Merchant (P2M) payments at foreign merchant outlets

👉 This question is strictly about international merchant payments, not remittances.

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🔍 Statement-wise Country Analysis

✅ Countries where UPI merchant payments are accepted:

• United Arab Emirates (UAE) ✅
• France ✅
• Singapore ✅

These countries have enabled QR-based UPI payments at select merchant outlets, mainly targeting Indian travellers.

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❌ Countries NOT covered under UPI merchant acceptance (as per current RBI/NPCI framework):

• Germany ❌
  • No UPI merchant acceptance agreement in place.
• Bangladesh ❌
  • Cross-border digital payment talks exist, but UPI merchant payments are not operational.

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🧮 Logical Count

Country	UPI Merchant Payments
UAE	✅
France	✅
Germany	❌
Singapore	✅
Bangladesh	❌

➡️ Total = 3 countries

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✔️ Correct option: (b) Only three

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🔑 High-Value Add-On Points (UPSC Gold)

🔹 1. Countries where UPI merchant payments are enabled (exam-safe list)

• Bhutan
• France
• Mauritius
• Nepal
• Singapore
• Sri Lanka
• United Arab Emirates

(UPSC may test exclusions rather than inclusions)

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🔹 2. UPSC Trap Alert 🚨

• Germany ≠ France
• Remittance linkage ≠ merchant acceptance
• MoUs ≠ operational rollout

UPSC often mixes negotiations, MoUs, and actual acceptance.

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🔹 3. Strategic Significance (1-liner ready)

UPI internationalisation strengthens India’s digital public infrastructure (DPI) diplomacy and reduces dependence on card networks.

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🔹 4. Institutional Clarity

• NPCI International Payments Ltd (NIPL) handles overseas UPI expansion.
• RBI regulates settlement and compliance.

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📍 GS Mapping

• GS Paper III
• Indian Economy
• Digital Payments | FinTech | Financial Inclusion

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🎯 Final Exam Lock

UPI merchant payments abroad ≠ all countries with remittance ties
UAE + France + Singapore = core trio

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