India stalls Alipay+ payments link with UPI over national security, data concerns
3 min read
The proposal, made by Alipay+ in January, was the first by a China-linked entity in the financial services sector and came against the backdrop of easing tensions between the two neighbours, which had a deadly border clash in 2020.
India has stalled a proposal from Alipay+ to integrate with its instant payment system for cross-border transactions, citing national security worries and concerns over the management and storage of user data, according to three sources familiar with the matter.
Key Takeaways
- India has stalled Alipay+’s proposal to integrate with UPI for cross-border payments, citing national security and data-storage concerns.
- Submitted in January, the proposal was the first by a China-linked entity in India’s financial services sector since the 2020 border clash.
- The stall comes even as bilateral tensions ease and Chinese President Xi Jinping is expected to visit New Delhi for a BRICS summit this month.
- Sources say the Indian government remains wary of Chinese data-access risks despite warming diplomatic ties.
Submitted in January, this proposal marked the first attempt by a China-affiliated entity to enter the financial services sector since the 2020 border clash, arriving as tensions between the two nations have begun to soften.
Efforts to maintain border stability are ongoing, and the anticipated visit of Chinese President Xi Jinping for a BRICS summit in New Delhi later this month is seen as a strategic move to normalize bilateral ties.
However, sources—who spoke on condition of anonymity due to the confidential nature of the talks—state that the Indian government remains wary of the risks associated with Chinese links and the potential for customer data misuse. This represents the first report on the Indian government’s specific stance on the issue.
Alipay+ is managed by Ant International, a fintech and digital payments company based in Singapore that became an independent entity from China’s Ant Group in 2024.
Requests for comment were not returned by Ant International, the Reserve Bank of India, the National Payments Corporation of India, or India’s ministries of finance, home affairs, and external affairs.
‘POLITICAL GROUNDS’
The initial plan sought to link Alipay+ with the Unified Payments Interface (UPI), which would allow Indian travelers to pay at over 150 million merchants across China, Hong Kong, and other Asian regions. A subsequent phase would have extended this capability to international visitors traveling within India.
One source noted that the foreign ministry cited “political grounds” for blocking the move, suggesting there is currently no clear path toward resolving these obstacles.
Furthermore, two sources revealed that law enforcement agencies have highlighted risks regarding data breaches, cyberfraud, and potential money laundering.
A third source explained that while the processing, storage, and dispute resolution of transaction data are standard checks for all cross-border payment agreements, China-linked firms face significantly more intense scrutiny.
Despite some relaxation of restrictions on Chinese firms in March, India continues to keep its financial services sector strictly guarded, maintaining barriers established after the 2020 conflict.
LINKING REGIONAL PAYMENT SYSTEMS
This attempt to integrate UPI and Alipay+ occurs as both systems expand their regional footprints in nations such as South Korea, France, Singapore, the Philippines, and Malaysia.
Across Asia, countries are increasingly linking payment systems to accelerate cross-border transfers and reduce operational costs.
According to FXC Intelligence, the market for outbound cross-border payments in the Asia-Pacific region is projected to grow to $23.8 trillion by 2032, nearly double its 2024 valuation.
Despite the clear economic advantages such a partnership would offer, a third source emphasized that national security concerns have overshadowed the potential benefits.
Published on September 3, 2026
