Making payments in India

In India, you should always be prepared to pay for things in three different ways: cash, UPI, and credit card.

Just about everybody takes cash. UPI is the Indian version of Venmo but it’s accepted widely for basically everything. Credit cards operate on the major networks: Visa, Mastercard, and even American Express.

Credit cards

Any major store or merchant that takes relatively large payments will take credit cards. Many places also take Apple Pay, but don’t count on it, as some will refuse to accept it despite having the ability to take contactless payments.

Tap-to-pay in India is sometimes called “Wi-Fi” (lol). Don’t get confused by their misnomer—they are not talking about actual Wi-Fi, they’re talking about contactless payments.

Keep in mind that some merchants may only allow you to pay with tap-to-pay if you are spending under a certain threshold, which in my experience has usually been ₹5,000. The safest bet is to bring your physical card so you can pay by inserting your chip.

American Express is pretty widely accepted by many merchants in India. To my pleasant surprise, I had very few rejections when attempting to use my Amex. This allowed me to pay with my Amex Gold at restaurants, which earned me that sweet 4x back on dining.

On the other hand, some places only take Indian credit and debit cards. For example, the Amex Concierge once recommended me a restaurant that ended up only taking Indian debit cards. In such cases, you’ll want to come prepared with the other two options: cash or UPI.

Withdrawing cash

It’s usually possible to find an ATM in India and expect to be able to use your foreign ATM card to withdraw some rupees. Unlike Japan, the ATMs in India, even in the middle of nowhere, are relatively interconnected with the rest of the world.

However, banks have a policy to not allow more than ₹10,000 to be withdrawn at once from the machine. (That being said, you can get around this by withdrawing ₹10,000 from one ATM and immediately going to a nearby one offered by another bank and withdrawing another ₹10,000.)

These days, expect to only get ₹500 notes from the ATMs. You should aim to get change as soon as possible, to have at least:

• Two ₹50 notes
• Four ₹100 notes
• One or two ₹200 notes

That should help you avoid getting scammed by people who conveniently have “no change” for anything under ₹500.

UPI

This is becoming ubiquitous around India. It’s the equivalent to Zelle in the United States, except it’s used very often for daily payments. Payments are made by scanning QR codes, which is more similar to Venmo than Zelle. UPI payments are made through UPI-compliant apps such as PhonePe, Paytm, and others. While you may hear of them, you likely won’t be able to use them.

OCI holders should open a NRI bank account through ICICI Bank or HDFC Bank, which will then grant them the ability to use UPI.

Foreigners with no familial connections to India are not allowed to use banks in any meaningful manner. However, they can sign up for UPI through Cheq, which is a service officially approved by the Reserve Bank of India (RBI) to accommodate foreigners.

Cheq requires an in-person KYC (know your customer) ID verification process. This can either be done with an agent who can come to your place of residence (likely unavailable due to high demand) or you can personally go to a Transcorp office as a walk-in. Depending on how competent the people processing your application are, it’ll take between 15 minutes and 1 hour, excluding wait times to process other customers who come before you.

The UPI account will be valid for as long as your visa is valid, theoretically even if your visa expires after your passport. That’s why it’s a great idea to get a 5-year e-visa, or even better, a 10-year visa.

One major caveat: with Cheq UPI, you can only pay merchant accounts, not personal accounts. While that theoretically shouldn’t be a problem, in practice, it will be. The average auto rickshaw driver or taxi driver is not going to have a merchant account; they’ll have a personal account.

Having UPI does not mean you should stop carrying rupee notes with you. Always carry cash; you never know if UPI will be accepted/will work or not.

I always prefer to pay with UPI over cash for two reasons. One, I don’t have to deal with rounding up due to the lack of change. Two, I get a receipt of the transaction, in case there is some dispute that arises where someone alleges I didn’t pay the correct amount of money.

Closing thoughts

Paying in India is relatively straightforward for foreigners, but you can expect to use cash more often than in the United States. While Venmo is used almost exclusively for individual (i.e. person-to-person) payments in the U.S., the Indian equivalent (UPI) is also used extensively to pay merchants too and has become ubiquitous throughout the country, especially with smaller merchants. While India is not going to become a cashless society anytime soon, it is well on its way in doing so.