The Digital Handshake: India’s UPI to Enable Seamless Payments for Indian Tourists in Japan

Imagine standing in the bustling streets of Akihabara or amidst the serene cherry blossoms of Kyoto. You’ve just picked up a beautiful souvenir or just finished a hearty bowl of ramen. Instead of fumbling for Yen notes or worrying about the transaction fees on your international credit card, you simply pull out your phone, open your favourite Indian banking app and scan a QR code. A familiar beep confirms the payment! It is the very near future.

India’s Unified Payments Interface (UPI) is set to debut in Japan on a trial basis, as a landmark development that promises to bridge the technological gap between two of Asia’s economic powerhouses. This will surely bring the ease of India’s favourite payment habit to Japanese shores. This development is the result of a strategic partnership between NPCI International Payments Limited (NIPL), the global arm of the National Payments Corporation of India and NTT DATA, which is a Japanese IT services titan. The two entities shook hands last year on a plan to trial the UPI payment system in Japan starting in fiscal year 2026.

A MoU was signed between NPCI International Payments Ltd (NIPL) and Japan’s NTT DATA on 14 October 2025

This is more than just a tech update. It represents a cultural shift. Japan, despite its reputation as a futuristic hub of robotics and high-speed trains, has long held a deep affection for physical cash. Contrastingly, India has sprinted in the opposite direction. It has become the world’s largest real-time payment market, with UPI processing around 18 billion transactions monthly. In fact, the International Monetary Fund (IMF), in its June 2025 report, hailed UPI as the "world's largest real-time payment system”, which now accounts for almost 50 per cent of transactions globally. As a consequence, this collaboration between India and Japan is, in many ways, the meeting of tradition and rapid innovation. And the timing for this couldn't be more perfect. Japan remains the top destination for travelling and it is witnessing an increase in the number of Indian travellers every year. According to recent data, the number of Indian tourists visiting Japan has surged significantly, with a total of 315,100 visitors recorded in 2025 (an increase of 35% compared to 2024), marking a significant jump. Whether it’s for business, the love of anime or the allure of Mount Fuji, Indians are traveling to Japan in record numbers.

However, for many of these travellers, the payment experience has often been a friction point. Exchanging Rupees for Yen, carrying thick wads of cash or dealing with forex cards can dampen the travel spirit. This new initiative aims to smooth out those wrinkles. The integration of UPI into Japan’s payment infrastructure, specifically leveraging NTT DATA’s massive reach (they operate CAFIS, Japan’s largest card payment processing network), Indian tourists will soon be able to pay at merchants just as easily as they do at stores back home.

How It Will Work?

The mechanism is elegantly simple, mirroring the experience millions of Indians already enjoy. The Merchant: A shop in Tokyo or Osaka participating in the trial will display a QR code compatible with the system. The Tourist: You open your existing UPI app, be it BHIM, PhonePe, Google Pay or your bank’s app. The Transaction: Scan the code, enter the amount in Yen (which your app will convert to Rupees for your approval) and enter your PIN. The Magic: The money is debited directly from your Indian bank account and the merchant receives their payment instantly. No seeking out currency exchange booths or no leftover coins. Just seamless, digital fluidity.

A Win-Win for Both Nations

For Japan, it's smart economics. Japanese merchants are keen to tap into the spending power of India's growing middle class. By removing the friction of payment, tourists will be encouraged to spend more freely and hassle-free. At the same time, helping Japanese merchants to take benefit from new opportunities. It aligns perfectly with the Japanese government's broader push to increase cashless transactions in the country, a goal they have been chasing for the last decade. For India, this is another feather in the cap of its "Digital Public Infrastructure" diplomacy- a perfect example of build in India, for the world, at its finest. UPI has already planted its flag in eight other countries, such as Bhutan, Singapore, Qatar, Mauritius, France, UAE, Sri Lanka and Nepal. Adding Japan (the first for an East Asian country) to this list of UPI partnerships is a significant validation of Indian fintech prowess. It signals that Indian technology is robust, scalable and secure enough for one of the world's most sophisticated economies.

Conclusion

The excitement around the trial is already palpable. The managing director and chief executive officer, Ritesh Shukla of NIPL and executives from NTT DATA have expressed optimism that this interoperability will not only boost tourism but also deepen the commercial bonds between the two nations. There are challenges ahead, of course. Ensuring wide merchant adoption in Japan will be key. It is not enough for the system to exist. Shopkeepers must be willing to place the QR codes on their counters. However, with NTT DATA - a trusted local giant- steering the ship on the Japanese side, the odds of success are high. We often talk about the India-Japan relationship in terms of heavy infrastructure- the Shinkansen bullet train project in India being the prime example. But in the 21st century, digital infrastructure is just as vital. This move transforms the relationship from government-level treaties to street-level convenience.

So, the next time you plan a trip to Tokyo, you can probably leave the currency calculator at home. India’s digital revolution is going global and Japan is its next big destination.

About the Author

Kaveri Jain is a doctoral researcher in International Relations at the Amity Institute of International Studies, Amity University, Noida. Her work focuses on India-Japan relations during the Shinzo Abe era. She has presented at academic conferences, published in peer-reviewed platforms and written on various aspects of India-Japan ties, including foreign policy, technology cooperation, cultural exchange, diaspora diplomacy and engagement in the Indo-Pacific region.