Prime Minister Modi at Global Fintech Fest.
MUMBAI: Prime Minister Narendra Modi inaugurated the 7th Global Fintech Fest at Jio World Centre on September 8, using the platform to frame India’s Digital Public Infrastructure as more than a payments convenience, positioning it instead as a core driver of macroeconomic resilience. He cited India’s 7.8% real GDP growth in Q1 FY27 and a recent sovereign rating upgrade to A-, the first such upgrade from a Japanese rating agency in three decades, as evidence that structural digital reforms are paying macroeconomic dividends.
At the centre of this sat UPI, which turned 10 on August 25. PM Modi noted the system processed over 24 billion transactions in August alone, illustrating its density by pointing out that roughly 50 lakh transactions occurred in just the first 10 minutes of his address.
From Domestic Success to Global Ambition
UPI now operates across 11 countries, but PM Modi drew a sharp distinction between simple tourist merchant acceptance and genuine cross-border interlinking, the kind seen in the India-Singapore UPI-PayNow framework. This deeper integration matters because global remittance costs currently average 6.2%, with South Asia corridors running as high as 7% due to layered correspondent banking. Direct switch-to-switch links like UPI-PayNow have already shown they can compress costs to 1-2% while cutting settlement times from days to under a minute, a meaningful gain given India receives over $120 billion in remittances annually, more than any other country.
Achieving this at scale, however, requires real infrastructure work: migrating to standardised ISO 20022 messaging, building real-time foreign exchange discovery mechanisms for round-the-clock settlement, and harmonising anti-money laundering checks across jurisdictions with different data localisation rules, complex but solvable engineering and regulatory problems rather than open questions of intent.
Beyond Payments: The Real Pivot
PM Modi’s more consequential message may have been his call for fintechs to move beyond payment processing into credit, insurance, savings and pensions. India’s insurance penetration remains under 4% of GDP, and informal workers with non-standard incomes are routinely excluded from formal credit despite widespread UPI adoption. The government’s answer leans on infrastructure already built: Credit Line on UPI lets banks extend pre-approved credit directly through QR codes, the Account Aggregator network enables consent-based data sharing for underwriting without paperwork, and Bima Sugam, India’s insurance marketplace, is slated for full transactional rollout by end-September 2026, covering motor, health and term life policies end to end.
PM SVANidhi as Proof of Concept
The Prime Minister pointed to PM SVANidhi, the street vendor credit scheme, as validation that this model works. By using UPI transaction histories as a substitute for traditional credit documentation, the scheme has helped onboarded vendors see average income gains exceeding 20%. The government has now extended it through 2030, signalling this flow-based lending approach as a template for other underserved segments rather than a one-off pilot.
The Four-Point Ask
PM Modi laid out a roadmap for the industry to manage risk as this expansion accelerates: robust, zero-trust cybersecurity architecture with early movement toward quantum-resistant encryption; privacy-by-design data practices compliant with the Digital Personal Data Protection Act; a stronger regulator-industry collaboration model, building on the RBI’s recognition of FACE as a self-regulatory body in 2024; and a proposed Fintech Consumer Protection Index to publicly rate providers on dispute resolution times and fee transparency. That index remains conceptual for now, its methodology and administering body still unpublished.
Why This Connects to India’s Credit Rating
The economic logic linking all this together is fairly direct. Digital rails formalise previously cash-based transactions, which widens the tax base and improves government visibility into informal economic activity. This formalisation, combined with faster capital velocity and lower transaction costs, strengthens fiscal metrics that rating agencies weigh, which helps explain why Modi tied UPI’s scale directly to India’s recent sovereign upgrade rather than treating them as separate stories.
What This Means Geopolitically
Beyond domestic benefits, exporting the India Stack model, identity verification through Aadhaar, open payment rails through UPI, data portability through Account Aggregators, serves a broader diplomatic purpose. It offers emerging economies an alternative to proprietary Western or Chinese payment infrastructure, while diversifying India’s own international payment channels away from dependence on any single global messaging system.
What Remains Unresolved
Several execution questions still need answers. How will real-time FX liquidity be maintained during off-market hours across 24/7 payment corridors? How will India’s zero-MDR domestic policy coexist with the capital investment needs of banks building this cross-border infrastructure? Will all major insurers actually achieve full technical integration with Bima Sugam by its September deadline? And critically, who will administer the Consumer Protection Index and will its scores carry real regulatory weight or remain a voluntary transparency exercise?
What to Watch
The coming months will reveal whether ambition converts into operational reality. Key signals include actual remittance fee compression on new FPS corridors, transaction volumes on Credit Line on UPI, whether Bima Sugam hits its full commercial launch on schedule and whether the Consumer Protection Index gets a published methodology at all. PM Modi’s speech set the direction clearly, the harder work now lies in the regulatory plumbing needed to get there.
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