UPI vs Visa, China and the World: Who Makes Money When Money Moves?

A UPI payment can feel almost too simple.

You scan a QR code, enter ₹1000, tap Pay, and a few seconds later the merchant has received the money.

But what actually happens behind that simple payment screen?

Who moves the money? Who earns money from the transaction? What happens when UPI is used for an international payment? And how does India’s UPI system compare with Visa, Mastercard, China’s Alipay and WeChat Pay, or Singapore’s PayNow?

These questions reveal something much bigger about the future of digital payments and global payment infrastructure.

The competition in payments is no longer just about cards versus mobile wallets. Increasingly, it is about the payment networks and financial infrastructure operating underneath them.

What is UPI?

One of the biggest misconceptions about UPI is that it is a payment app.

It isn’t.

UPI, or Unified Payments Interface, is a payment infrastructure developed and operated by the National Payments Corporation of India (NPCI).

Apps such as Google Pay, PhonePe and BHIM provide interfaces through which customers can access UPI.

The distinction is important.

Think of UPI as a road rather than a car. The payment app is what you use to access the road, while UPI provides the infrastructure that allows participating banks and payment providers to communicate and process transactions.

A simplified domestic UPI payment looks something like this:

Customer → UPI app/bank → UPI infrastructure → Merchant’s bank

The customer sees a single payment.

Behind the scenes, multiple financial institutions and technology systems may be communicating with each other.

This is one reason how UPI works is more interesting than it first appears.

Is UPI India’s version of Visa?

Not exactly.

There are similarities, but UPI and Visa were designed around different payment models.

Visa operates a global card-payment network connecting cardholders, merchants, banks and other financial institutions.

UPI is primarily designed around bank-account-to-bank-account payments.

A simplified card transaction could look like:

Customer → Card → Merchant → Acquiring bank → Card network → Issuing bank

A UPI payment is closer to:

Customer → Bank/UPI app → UPI → Merchant’s bank

Both systems provide payment infrastructure, but their economics, participants and technology are different.

That distinction becomes particularly important when looking at UPI vs Visa and asking who actually makes money from payments.

How does Visa make money?

Imagine you spend £100 using a Visa card.

The merchant does not simply pay Visa £100 for the transaction.

Instead, a card payment can involve several participants, including the cardholder’s bank, the merchant’s bank, payment processors and the card network.

Different fees may apply at different stages.

Visa earns revenue from operating its payment network and providing related services to financial institutions and businesses.

The important point is scale.

A payment network does not necessarily need to charge consumers directly for every transaction to become a highly valuable business.

If billions of transactions pass through its infrastructure, relatively small amounts of revenue across a huge volume can create a substantial business.

This is one reason Visa and Mastercard have become some of the world’s most important payment companies.

So how is UPI different?

UPI was designed with a different philosophy.

A major objective was to make digital bank payments convenient, interoperable and widely accessible.

A customer does not normally need to know which UPI app the recipient is using.

The systems can communicate across participating banks and payment providers.

India has also maintained a strong emphasis on keeping many domestic UPI transactions free or very low-cost for consumers and merchants.

That means it would be misleading to say:

“UPI takes a commission from every payment.”

The economics are more complicated.

Different participants can have different commercial arrangements, and the costs and incentives can vary depending on the type of transaction.

The important distinction is that UPI’s domestic model is not simply a copy of the card-network business model used by Visa or Mastercard.

What happens when UPI crosses India’s borders?

This is where the story gets particularly interesting.

India has been developing connections between UPI and payment systems in other countries.

Singapore is one of the clearest examples.

Singapore has its own instant-payment system, PayNow, while India has UPI.

The two systems can be connected for supported cross-border payments.

This does not mean Singapore has replaced PayNow with UPI.

Instead, the two systems can communicate with each other.

Think of it as connecting two existing roads.

India: UPI ←→ Cross-border connection ←→ PayNow: Singapore

Each country can maintain its own domestic payment infrastructure while enabling certain international payments between them.

This is an important development in the world of cross-border payments.

Does India earn money every time someone uses UPI abroad?

Not necessarily.

This is one of the areas where payment-system discussions can become misleading.

An international UPI payment may involve several organisations, including:

• Payment networks
• Banks
• Payment service providers
• Foreign financial institutions
• Currency-conversion providers
• Technology companies
• Settlement and infrastructure providers

The exact commercial arrangement determines who receives which fees.

Therefore, it would be incorrect to assume that the Indian government automatically receives a percentage of every international UPI transaction.

It would also be incorrect to assume that NPCI receives a fixed commission from every overseas UPI payment.

The economics depend on the specific partnership, payment route and transaction structure.

UPI and international payments

Cross-border payments are considerably more complicated than domestic payments.

Suppose someone in India makes a payment to a merchant overseas.

To the customer, the process might look like:

₹ → Pay → Payment successful

Behind the scenes, however, the transaction may involve:

Customer

↓

Indian bank/payment provider

↓

UPI

↓

Cross-border payment connection

↓

Foreign payment system or financial institution

↓

Merchant’s bank

↓

Merchant

There may also be currency conversion, compliance checks, settlement requirements and transaction fees.

The customer sees a few taps.

The financial infrastructure can involve multiple institutions across different countries.

What about China?

China developed a different model for digital payments.

Anyone following China’s digital economy will be familiar with Alipay and WeChat Pay.

Both became deeply integrated into everyday commerce, including restaurants, shops, transport, online shopping and other services.

China therefore does not simply operate a system equivalent to India’s UPI.

Its digital-payment ecosystem developed around a combination of banks, technology companies and large payment platforms.

A simplified comparison would be:

India: UPI-centred interoperable payment infrastructure

China: Alipay and WeChat Pay-led digital-payment ecosystem

Singapore: PayNow-based instant-payment infrastructure

Brazil: Pix-based instant-payment infrastructure

There are similarities between these systems, particularly the use of mobile phones and QR codes.

But their underlying structures and economic models are not identical.

How does the US payment system compare?

The United States is different again.

There is no single consumer payment system that dominates in exactly the same way UPI does in India.

Americans use a mixture of payment networks and services, including:

• Visa
• Mastercard
• Zelle
• Venmo
• Cash App
• Bank transfers
• FedNow
• Other payment services

This means UPI vs the US payment system is not really an apples-to-apples comparison.

The US has a much more fragmented collection of payment rails and services.

Some are designed for card payments, some for bank transfers and others for peer-to-peer payments.

Who actually gets the money?

Now consider a customer making an international digital payment.

The user might see only:

Pay → Successful

But the underlying infrastructure could involve several stages.

For example:

Customer → Bank → Payment network → Cross-border connection → Foreign institution → Merchant’s bank → Merchant

At different points, the system may need to account for:

• Transaction value
• Sender and recipient
• Currency
• Exchange rate
• Applicable charges
• Participating institutions
• Settlement obligations
• Regulatory requirements

So who earns money?

There isn’t necessarily one answer.

Different participants can earn revenue for providing different parts of the infrastructure.

This is why it is better to think about payment networks as an ecosystem rather than a single company taking a cut from every transaction.

Is international payment settlement done manually?

Mostly, no.

At the scale of modern financial systems, manual processing would be impossible.

Payment infrastructure relies heavily on automated systems to process transactions, record obligations and reconcile accounts.

Imagine millions of transactions taking place over the course of a day.

Systems can automatically process information such as:

• Transaction amounts
• Sending and receiving institutions
• Currencies
• Exchange rates
• Fees
• Settlement positions
• Transaction references

This is much closer to automated financial accounting at enormous scale than someone manually checking every payment.

People are still essential, particularly for exceptions.

Fraud investigations, disputes, compliance issues, reconciliation problems, audits and regulatory matters can all require human intervention.

But the normal payment flow is highly automated.

Why UPI matters for India’s global ambitions

This is arguably the most important part of the UPI story.

India is not simply trying to make UPI useful for people paying at Indian shops.

By connecting UPI with payment systems in other countries, India has the potential to participate more directly in the infrastructure supporting international digital payments.

That could be strategically significant.

The more countries connect their instant-payment systems, the easier it may become to move money across borders without relying exclusively on traditional card networks or older correspondent-banking structures.

However, this does not mean UPI will replace Visa or Mastercard.

It does not mean every country will adopt UPI.

And it certainly does not mean international payments will suddenly become free.

What it does demonstrate is that the architecture of global payments is changing.

The bigger business opportunity

There is an important point that often gets missed.

The value of a payment network is not necessarily based on charging a large fee for every individual transaction.

It can come from becoming critical financial infrastructure.

If millions or billions of people, banks and businesses depend on a network, even relatively small sources of revenue can become commercially significant.

This is part of the reason Visa and Mastercard are so powerful.

UPI operates under a different model, but the strategic principle is similar:

Build infrastructure that people trust and use at enormous scale.

Once that infrastructure connects across national borders, the potential becomes even greater.

These systems are not direct copies of each other.

Each developed in response to a different financial system, regulatory environment and technology market.

Frequently Asked Questions

Is UPI owned by the Indian government?

UPI was developed and is operated by NPCI, which runs major parts of India’s retail-payment infrastructure.

NPCI was established by the Indian banking ecosystem with support from the Reserve Bank of India and the Indian Banks’ Association.

It is therefore more accurate to describe UPI as India’s payment infrastructure rather than simply calling it a government app.

Does India make money whenever someone uses UPI?

Not necessarily.

The revenue model depends on the type of transaction and the commercial arrangements between the participating organisations.

Domestic UPI has historically focused on very low-cost payments, while international arrangements can have different economics.

Is UPI the same as Visa?

No.

Visa is primarily a global card-payment network.

UPI is primarily a bank-account-based payment infrastructure.

They address similar problems — enabling payments — but use different architectures and business models.

Can other countries build something like UPI?

Yes.

Countries can develop their own instant-payment infrastructure.

Examples include India’s UPI, Brazil’s Pix and Singapore’s PayNow.

The important point is that countries do not necessarily need to copy one another exactly.

Can UPI connect with another country’s payment system?

Yes.

Cross-border payment connections can allow UPI to interact with foreign payment systems.

The India-Singapore connection between UPI and PayNow is an important example.

Is international payment settlement manual?

Mostly not.

Transaction processing and much of the reconciliation are automated.

Humans typically become more involved when there are exceptions, disputes, fraud concerns, regulatory requirements or reconciliation problems.

Why are international payments complicated?

Because several organisations and jurisdictions can be involved.

Different currencies, regulations, banks, payment networks, fees and settlement arrangements all need to work together.

The customer sees one payment.

The infrastructure behind that payment can involve an entire chain of institutions.

The future of global payments

The next time you scan a QR code and see “Payment Successful”, remember that you are seeing only the front end of a much larger financial system.

Behind that message is infrastructure designed to move payment instructions, communicate between financial institutions, record transactions, calculate obligations and ultimately settle funds.

India’s UPI is particularly interesting because it demonstrates what can happen when payment infrastructure is designed around interoperability and instant bank payments.

China followed a different path through platforms such as Alipay and WeChat Pay.

The US developed a more fragmented ecosystem involving card networks, bank-transfer systems and digital payment services.

Singapore developed PayNow and connected it with other payment systems.

Different countries have taken different routes.

But the direction is increasingly similar:

Faster, cheaper, more interoperable and more connected digital payments.

And the biggest competition in the future may not be between payment apps.

It may be between the payment networks underneath them.

That is where the real battle for the future of global payments could take place.

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