It was a moment this week during Prime Minister Narendra Modi's speech at the Global Fintech Fest in Mumbai where the tone of what was being said changed from celebration to instruction. He had been speaking about how he was completely satisfied with what he saw in the UPI as a proof of the fact that a bank branch is not mandatory to access finance and French President Emmanuel Macron has echoed his views on the system, calling his three appearances and calls in the last two days a "hat-trick" for a developed India. Then came the transition: Payments alone are no longer sufficient, he told the 100,000-plus attendees at the four-day conference. We need to take the Indian rulebook overseas, said the man, and for the fintech industry to take a step forward to credit, insurance, savings and pensions.

That teaching arrives at a time when the numbers are truly stating the sausage-making. The highest-ever monthly volume of UPI transactions was recorded in August, with 24.51 billion transactions valued at ₹29.82 lakh crore, the data from the National Payments Corporation of India (NPCI) show. That comes to about 791 million payments per day from a ten-rupee tea stall to business settlements. Volume rose 22 per cent year-on-year and cumulative transaction value rose to a mere ₹7,000 crore in its first full year of operation in 2016-17 to somewhere around ₹314 lakh crore in the year just ended. UPI has nearly four times as many transactions per month as it did four years ago, in August 2022.

Of note, and noted by several payment executives around the same numbers, is the direction that the growth curve is bending. Value growth has pretty much stagnated at just below ₹30 lakh crore, while volume continues to increase, leading to a decline in average ticket size. It is not a red flag but a description of what financial inclusion is: the marginal user is no longer a shopper with a high ticket size who is going online, but a vegetable vendor, an auto driver or a kirana store owner whose cash is now a thing of the past. The PM's own words that "where traditional banks could not reach, where bank branches could not reach, UPI has taken the banking system there" is not campaign rhetoric, but is a good description of the transactions data.

It was a significant day as it was the 10th anniversary of UPI and it came with the genuine hard-learned upgrade of India's borrower's credibility. Last year, S&P Global Ratings upgraded India's sovereign rating to BBB from BBB minus, its first upgrade in eighteen years, bringing the nation's rating into investment-grade status with Mexico and Indonesia. The fintech story is intersecting with the macroeconomic story, which the government projects at 7.8 percent growth despite what Modi himself termed as a "phase of conflict and uncertainty" over oil and trade in the world. A rate cut this way, a ratings upgrade that way, a payments network churning over a trillion dollars in annual transaction volumes: They combine for the pitch India is selling to global capital, and the pitch is being played loudest at the fintech fest.

The question, however, is not whether UPI has been successful in its home market; UPI has been continually breaking its own records the last four months: This is a point that has been pretty well decided. Whether India can export the model without exporting the fragilities that accompany it. UPI's presence on the international stage has expanded to eleven countries, such as the UAE, Singapore, France, Mauritius, Nepal, Bhutan, Sri Lanka, Cambodia, Qatar, Greece and Uzbekistan, and the Paynow partnership with Singapore's government is the model that UPI wants to emulate, wherever the diaspora is large, trade volumes high, or where a government is willing to connect.

Modi's idea that “we can create our own rules and standards and integrate them with the world” is an interesting twist on how digital infrastructure has generally spread around the world, from Silicon Valley and to the rest of the world. And it's why institutions like the IMF and World Bank are now adopting India's digital public infrastructure stack as a template for other developing economies.

However, industry-created risk surveys complicate the celebratory framing. Another solution that came out from this year's Fintech Association for Consumer Empowerment and Grant Thornton Bharat’s Fintech Barometer is that reputational damage is the leading concern of fintech companies, followed by cybersecurity, regulatory risk, data access and privacy. About 46 per cent of the companies surveyed perceived failures/outages of shared digital infrastructure such as UPI/Aadhaar as a high-severity threat, which is a reasonable anxiety considering the centralization of the country's payment rails in one system.

The Digital Personal Data Protection Act is just starting to come into effect and the deadline for consent-manager registration is November, and the obligations for compliance are not going into effect until May 2027; there is a decent amount of runway left before the rules of the road are written while volumes are tripling.

There's also a more subdued, business-like conflict lurking behind everything. Most peer-to-merchant transactions are free at the point of sale, which has been crucial for the success of UPI but has also led to payment firms on the rail struggling to generate profits from the trading alone. It's a big deal to the industry because it's a big deal to the government's inclusion goals.