Summary of this article
UPI expands to Sri Lanka amid rising Indian tourist flows
Over 21.7 billion monthly UPI transactions reflect strong growth
UPI now live across eight countries for merchant payments
NPCI International Payments (NIPL), the international arm of the National Payments Corporation of India (NPCI), has extended Unified Payments Interface (UPI) merchant acceptance in Sri Lanka, thus allowing Indian tourists to pay for transactions in the island nation using their existing mobile banking applications.
The integration will let Indian travellers and tourists to scan the LankaQR codes at merchant outlets in Sri Lanka and make payments directly from their bank accounts in India. This aims to reduce the dependence on cash and currency exchange, particularly for small and frequent transactions.
The rollout coincides with a consistent increase in travel between the two countries. More than 531,000 Indian tourists visited Sri Lanka in 2025, up from 416,000 tourists in 2024. Indian tourists are considered the largest group of foreign visitors to Sri Lanka.
On the other hand, UPI's expansion has seen a dramatic rise in the past few years. The system has processed more than 21.70 billion transactions in January 2026 after recording 20.47 billion transactions amounting to Rs 26.32 lakh crore in November 2025. Daily volumes have also crossed 700 million transactions.
Globally, UPI accounts for approximately 49-50 per cent of all real-time payment transactions with approximately 228.30 billion transactions per year; the largest such system in the world.
How UPI Will Work With LankaQR
The partnership connects UPI with LankaQR network in Sri Lanka. Indian users can scan QR codes and make payments on the spot with their funds debited from their bank accounts.
The system will also display exchange rates at the time of payment, providing users with transparency on the final amount of the transaction. This is especially relevant in retail spending, where there are a lot of low value transactions.
Merchant Coverage And Scale
UPI payments are now available at several merchant categories in Sri Lanka, such as hotels, supermarkets, cafes and retail stores. These include chains, such as Cinnamon Hotels, Taj Hotels, Barista, Keells Supermarket and Odel.
The network is expected to broaden as more merchants go for QR-based payments. In India, UPI already has more than 700 million QR code touchpoints, which is an indication of the magnitude at which the system is operating in the country.
UPI's International Expansion
UPI is presently live for merchant payments in over nine foreign countries, including the UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, Mauritius and Qatar.
Beyond merchant payments, NPCI has also extended UPI access to users with international mobile numbers across more than 12 countries including the US, the UK, Saudi Arabia, Canada, Australia and Hong Kong.
Simultaneously, NPCI is also holding talks with more than 20 countries in Africa and South America to deploy UPI-like systems or connect with local payment infrastructure.
Implications For Cross Border Payments
The expansion into Sri Lanka is part of a wider trend towards connecting domestic payment systems for cross-border transactions. For anyone travelling to Sri Lanka, this lessens the reliance on using cards, cash, and foreign exchange for everyday spending.
For merchants, particularly those in tourism-based industries, digital payments can make it easier to process payments and handle cash.
UPI's international introduction is still ongoing, and its use is dependent on merchant acceptance and user familiarity in each country. However, with transaction volumes continuing to increase and more partnerships in the works, cross-border use of real-time payment systems is likely to increase.
