While UPI QRs are interoperable within the UPI ecosystem-across banks, prepaid issuers, and apps-they remain incompatible with other major payment networks like Visa, Mastercard, RuPay, and even systems like IMPS
UPI has transformed transactions nationwide, handling 185 billion transactions in FY 2024–25—over 83% of all retail digital payments.
Image: Shutterstock
India's digital payments revolution, led by the Unified Payments Interface (UPI), is a global success story. Since its launch in 2016, UPI has transformed transactions nationwide, handling 185 billion transactions in FY 2024–25—over 83 percent of all retail digital payments. Of this, over 62 percent accounted for person-to-merchant (P2M) payments, highlighting broad adoption. Even informal payments via person-to-person (P2P) UPI QR scans reinforce UPI’s dominance in the merchant payment space.
By FY 2024–25-end, UPI P2M accounted for 90 percent of formal merchant digital payments. Traditional instruments like credit cards (3.7 percent), debit cards (1.2 percent), and prepaid instruments (5.5 percent) lag far behind—and not all Prepaid Payment Instrument (PPI) transactions are merchant-related. This dramatic shift underscores the scale and structural impact of QR-based UPI acceptance.
However, beneath this success lies a critical challenge: the lack of true network-level interoperability. While UPI QRs are interoperable within the UPI ecosystem—across banks, prepaid issuers, and apps—they remain incompatible with other major payment networks like Visa, Mastercard, RuPay, and even systems like IMPS. For example, a UPI QR code displayed by a roadside tea vendor cannot be scanned using a card app like Visa Tap-to-Pay or an IMPS-based app, even though both are regulated systems. This means that if a UPI app faces downtime, neither a card-based app nor an alternative scheme can complete the transaction via the same QR code.
As of early 2025, India had approximately 658 million UPI QRs versus just 67.2 million Bharat QRs—the latter being the only fully interoperable format across all major payment networks. Bharat QR, developed jointly by NPCI, Visa, Mastercard, and Amex under the EMVCo global standard, allows any participating app (whether UPI- or card-based) to scan and process the payment, intelligently routing it via the customer's preferred network. In contrast, UPI QR codes are tightly bound to the UPI infrastructure and cannot be scanned or interpreted by card-based apps, even though the hardware and software might support scanning.
Also read: From UPI to ONDC: The role of centralised orchestration in DPI success
[This article has been published with permission from IIM Bangalore. www.iimb.ac.in Views expressed are personal.]