India has halted a proposal by Alipay+ to connect its payment network with the country’s UPI system citing national security and data protection concerns, highlighting tensions over Chinese-linked financial firms amid improving regional connectivity efforts.
India has put on ice a proposal by Alipay+ to connect with the country’s instant payments rail for cross-border use, after officials raised national security questions and concerns about how customer data would be stored and handled, according to sources cited by Reuters. The move marks the first known bid by a China-linked company in India’s financial services space and comes at a delicate moment in relations between New Delhi and Beijing, which have been trying to steady ties after a deadly border clash in 2020.
Alipay+ had sought to link into the Unified Payments Interface, or UPI, in a plan that would have allowed Indian travellers to pay merchants across China, Hong Kong and other parts of Asia through its network of more than 150 million merchants. A later phase would have opened the system to overseas visitors in India. Reuters reported that the proposal was made in January, and that India’s foreign ministry cited “political grounds” for stalling it, with no clear route yet to resolving the objections.
Officials’ worries centre on Alipay+’s Chinese links, possible misuse of customer data and the risk of breaches that could expose users to cyberfraud, according to the sources. Law enforcement agencies have also flagged money-laundering concerns. Although Alipay+ is run by Singapore-based Ant International, a payments and fintech company spun out of China’s Ant Group in 2024, the scrutiny appears to be more exacting for China-linked firms, even after India eased some restrictions on such investments in March.
The episode also underlines the wider push across Asia to connect domestic payment systems for cheaper and faster cross-border transactions. Alipay+ and UPI have both been expanding regional partnerships, including in Malaysia, the Philippines, South Korea, Singapore and France. FXC Intelligence estimates that outbound cross-border payments from Asia-Pacific will reach $23.8 trillion by 2032, almost double the 2024 level, but in India the security debate has so far outweighed the commercial case.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
