How does UPI work for online payments?
UPI moves money instantly between two bank accounts. At checkout the shopper chooses UPI. On a phone, the checkout opens their UPI app with the payment details already filled in, and they approve it there. On a desktop, they scan a QR code with the app. Stripe describes UPI as a real-time payment system developed by the National Payments Corporation of India, where customers authenticate and approve in their preferred banking or wallet app.
The older collect flow is going. In that flow the shopper typed their UPI ID at checkout and then accepted a request in their app. Razorpay says that, under NPCI guidelines, UPI Collect is deprecated from 28 February 2026, and merchants must move to the intent flow or a UPI QR code. Razorpay lists exemptions, including iOS app and mobile web payments, mandate operations and cross-border payment aggregator businesses.
Recurring payments run on e-mandates, also called UPI AutoPay. The shopper authorises a mandate once in their UPI app. Under the Reserve Bank of India’s e-mandate framework, the first payment needs an additional factor of authentication, and later payments up to INR 15,000 each can be taken without it. Stripe applies the same INR 15,000 maximum for recurring UPI payments and limits single payments to INR 1 to 100,000.
Where and how do shoppers use UPI?
UPI is how India pays. The Reserve Bank of India’s Annual Report 2025-26 says UPI contributed nearly 86% of retail payment transactions in the year, with volume up 30% and value up 20.6%. The Ministry of Finance’s 2025 year-end review notes that UPI now also supports payments from RuPay credit cards.
UPI also travels with Indian shoppers. The same review says UPI QR acceptance is live in Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, the UAE and Qatar, so Indian travellers can pay merchants there with their own UPI apps. These are mainly in-store payments. For online sales, the shoppers are in India and pay in INR.
Cross-border merchants can reach UPI from outside India. Stripe lists UPI with India as the customer location and INR as the currency, and makes it available to Stripe accounts in countries such as the United States, the United Kingdom, Singapore, Australia, Canada and every EU country.
What rules and costs should merchants know?
Indian payment aggregators carry the cross-border flow. Since the RBI’s circular of 31 October 2023, entities that process online payments for imports and exports of goods and services are regulated as Payment Aggregators, Cross Border (PA-CB). For a foreign merchant selling to Indian shoppers, the PA-CB collects the money into an escrow account, moves it to an Import Collection Account at an authorised bank and pays the foreign merchant only from that account. It may onboard merchants abroad directly or work through marketplaces and payment providers abroad. Either way it must carry out due diligence on those merchants. Buyer checks are also needed when a single imported item is worth more than INR 2,50,000, and the maximum value per unit of goods or services is INR 25,00,000. Imports can be paid with any instrument from authorised Indian payment systems except small prepaid instruments, so UPI qualifies.
The aggregator sector is growing. The RBI’s annual report counts 68 authorised non-bank payment aggregators at the end of March 2026, up from 51 a year earlier, covering online, cross-border and physical aggregators under its Master Direction of 15 September 2025.
Authentication rules are tightening. The RBI’s directions on authentication for digital payments, which apply from 1 April 2026, keep two-factor authentication as the minimum and let issuers add risk-based checks on top.
Refunds and disputes are simple but final. Stripe allows UPI refunds up to 60 days after payment, completed within up to 7 working days. Fraud risk is low because the shopper authenticates with their bank, but a shopper can still dispute with their bank or UPI app, for example after a failed payment or non-delivery. If the bank accepts the claim, the merchant cannot contest it.
How would Omno handle UPI?
- One checkout: UPI would appear in the Omno hosted checkout next to cards, wallets, local methods and crypto, opening the shopper’s UPI app on mobile or showing a QR code on desktop. Merchants with their own payment screens would use Direct Links on their own buttons.
- Routing rules: The merchant would set rules that send INR payments from Indian shoppers to a connected provider or Indian payment aggregator that supports UPI. Omno connects through those providers; it is not an acquirer and does not hold funds.
- Cascading: In the hosted checkout, if that provider is unavailable or rejects the request before the shopper approves, the payment would move to the next provider in the rule until one accepts.
- Status: The order would stay pending until the shopper approves in their app, and the final result would reach the merchant by webhook.
What should merchants plan for?
Use the intent flow and QR codes. UPI Collect is being phased out for most merchants, so the checkout should open the UPI app or show a QR code.
Choose a regulated route. A foreign merchant reaches UPI through an authorised cross-border aggregator or a provider that works with one, and that partner will run its own checks on the business.
Plan subscriptions around the limit. Recurring UPI payments above INR 15,000 need the shopper to authenticate again.
Refund within the window. Stripe allows UPI refunds for 60 days, so handle returns promptly.