In a landmark step toward cheaper and faster international money transfers, India Post has partnered with the Universal Postal Union (UPU) and NPCI International Payments Ltd (NIPL) to launch a new global digital remittance service linking India’s homegrown Unified Payments Interface (UPI) with the UPU’s Interconnection Platform (UPU-IP).
The initiative, unveiled at the 28th Universal Postal Congress in Dubai in September 2025, promises to reshape the way millions of overseas Indians, small traders and e-commerce players move money across borders, bringing together the global reach of the postal network and the speed of India’s world-leading payments system.A new era for cross-border payments
The UPU-UPI partnership represents a significant leap in the modernization of postal financial services. It connects India’s real-time payments backbone – the UPI – directly to the UPU’s global network of more than 190 national postal operators, an infrastructure that has handled remittances for decades, particularly in underserved regions.
At the heart of this innovation lies the UPU-IP – a global payment “switch” that allows posts to exchange money-transfer instructions in real time. “It’s a central database through which all international postal payment instructions go – from origin to destination post. It’s API-driven and allows instant payments from end-to-end,” says David Avsec, Products and Account Relationships Coordinator at the Postal Technology Centre at the UPU.
India Post as the gateway to UPI
India Post plays a pivotal role in the partnership – not only as a participant but as the gateway connecting UPU-IP to UPI, which in turn links every major Indian bank and digital wallet. “India Post has initiated the project and sponsored it,” Avsec says. “Operationally they remain the intermediary – the gateway to UPI for the rest of the PosTransfer network.”
Under the system, funds sent from abroad can be collected at post offices using an ID and reference number or credited directly to an India Post Payments Bank (IPPB) or any UPI-linked account. That dual option makes the service both digital and inclusive, bridging the gap between modern fintech systems and the physical postal network that continues to serve millions in rural or remote regions.
“UPI is definitely about access,” Avsec notes. “It provides Indians with a simple and low-cost payment system. With India Post bringing the service to the PosTransfer network, accessibility is improved further, especially in countries of origin, where the postal channel now reaches UPI in India.”
How the system works
The integration between UPU-IP and UPI allows a seamless flow of funds. Once a sender initiates a transaction through their local post office abroad – part of the UPU PosTransfer network – the payment instruction travels instantly via UPU-IP to India Post, which then passes it through to the UPI system.
“The UPU-IP central database makes it easy to connect other payment networks and switches,” Avsec says. “That’s what we did with India’s UPI. The integration is real-time, API-driven. For foreign posts, it’s business as usual, their counterpart in India remains India Post, the conduit to UPI.”
The result is a far wider service reach. “With the UPU-India Post-UPI integration, clients of the posts at origin can credit accounts of anybody owning an account in India,” he adds. “Payments at destination are now made in cash by India Post or directly on account by UPI.”
Bringing global remittances into the digital age
The partnership aims to bring down the cost of cross-border transfers, which, according to the World Bank, often exceed 6% per transaction – a heavy burden on overseas workers and small traders.
By leveraging UPI’s low-cost architecture, the new system could cut those fees dramatically. It also offers near-instant settlements, compared to the days-long processing typical of traditional remittance channels.
Avsec sees this as a natural evolution for the postal sector: “We have high expectations for this new service. Every time we connect the UPU network to existing national or regional payment infrastructures, we create conditions to develop volumes – and make life easier for customers already enrolled in those systems.”
The model could also prove transformative for small exporters and e-commerce businesses that rely on frequent cross-border transactions. “With the UPI service we reach bank accounts,” Avsec adds. “That comes with integrated processes for compliance and allows us to reach both individuals and SMEs. So, this project can contribute to developing other services than remittances, such as e-commerce payments.”
From pilot phase to global rollout
Both India Post and the UPU’s technical teams have completed the integration and testing phase, with a pilot program now underway. “On India’s side, everything is ready, as well as with us at the UPU-IP,” said Avsec. “We are currently onboarding the first sending posts for a pilot phase.”
While he was unable to name the participating pilot countries, Avsec confirmed that the service would launch publicly after successful trials, “likely in 2025”.
Technical challenges were inevitable given the number of organizations involved. “The challenges were mostly about coordinating between three parties – the UPU, India Post and NPCI (the owner of UPI),” Avsec said. “Regular communication was essential, and both India Post and UPI were very open when we had to raise issues. Cooperation was very good, and we jointly found solutions to problems arising on each side.”
A model for other nations
The UPU hopes that India’s example will inspire similar collaborations elsewhere. “We must first officially launch the service with India,” Avsec says. “From there, we’ll observe the results and determine the best approach to replicate in other countries. National payment switches exist in many places, and we hope India’s example will motivate other posts to engage in similar projects.”
For Avsec, the success of this initiative demonstrates not only India’s leadership in digital payments but also the continued relevance of the postal network in a rapidly digitizing financial world.
“This has been an ambitious project, and at the UPU has been driven by a very small IT team,” he says. “It shows that we can deliver on projects of this scale even with limited resources. Hopefully, when volumes develop thanks to the new UPI service, we’ll be able to add resources and proceed faster with comparable projects in the future.”
Empowering inclusion through innovation
Ultimately, the UPU-UPI partnership represents more than a technological integration, it’s a statement about financial inclusion, trust and innovation through collaboration.
By combining the universal reach of postal networks with the efficiency of modern payment services, it offers a blueprint for other developing nations seeking to digitize remittance systems without leaving anyone behind.
“It’s about making life easier for people who rely on these payments,” Avsec concludes. “It’s more convenient to have a new postal channel from their existing service provider than to enroll in a totally new payment scheme.”
This article first appeared in Union Postale Autumn 2025.