Proposal stalled over security and data concerns
India has paused a proposal from Alipay+ to connect with its UPI payment system, according to three sources, due to security and data concerns. The January proposal was the first from a China-linked company in India's financial sector, arriving as tensions were easing following the 2020 border conflict.[S1]
The Indian government's concerns stem from Alipay+'s Chinese links, data-security risks, and potential misuse of customer data, the sources said. Law enforcement agencies have also raised concerns about money-laundering risks and data breaches that could expose customers to cyberfraud. The scrutiny is significantly higher for China-linked entities, one source noted.[S1]
Background and regional context
Alipay+ is run by Ant International, a Singapore-based fintech firm that was separated from China's Ant Group in 2024. The plan sought to enable Indian travelers in China, Hong Kong, and other Asian regions to pay at over 150 million merchants within Alipay+'s network. A later stage would have allowed international visitors to use Alipay+ in India.[S1]
This development occurs as both payment systems aim to expand regional collaborations in nations such as Malaysia, the Philippines, South Korea, Singapore, and France. Asian countries have been interlinking their payment infrastructures to reduce costs and speed up cross-border transactions. The Asia-Pacific outbound cross-border payment market is projected to hit $23.8 trillion by 2032, nearly doubling from 2024 levels.[S1]
Decision-making clouded by national security
A third source indicated that national security issues have overshadowed the decision, despite the potential benefits of an Alipay+-UPI link for cross-border payments. India's financial services sector remains tightly controlled, even after the country relaxed some restrictions on Chinese firms in March. Those restrictions were imposed following the 2020 border clash.[S1]
