The fight for the future of global digital payments

15 August 2025

The new US administration has unleashed a whirlwind of tariff wars and frantic trade talks, igniting fears over the unravelling of the global economic order. However, Asia’s rising powers — China and India — have long recognised this “churning” as an ongoing transformation brought on by the growing contradictions of globalisation and the imperatives of emerging technology.

Amid this evolution, the international financial system has become a critical site of contestation. Both China and India aspire to dismantle global economic hierarchies through initiatives like “de-dollarisation” and governance reforms at key intergovernmental organisations. Furthermore, the Asian nations appreciate the transformative potential of new financial technologies, and the opportunity for rising players to shape international economic futures.

To seize that opportunity, China and India are leading the global charge towards digital payments, positioning their platforms and models as the foundation for a new financial order. The state-driven move to digital payments in domestic markets threatens to marginalise commercial banks and historically dominant payments firms like Visa and Mastercard, empowering a new set of private players like Alipay and PhonePe. Meanwhile, cross-border applications could displace prominent Western-led international financial institutions like SWIFT.

While India prioritises global adoption of its indigenous payments architecture, China has jumped ahead on cross-border digital transactions. Critically, this race is evolving rapidly through innovations in digital finance and entanglements with broader structures of strategic competition. Policymakers around the world must awaken to these shifts, or risk being left behind in the fast-emerging era of digital economy.

The digital payments revolution

Just as modern credit cards remade finance in the final decades of the 20th century, digital payments appear poised to conquer the global economy in the 21st century. The volume of global digital payments has exploded over the past decade, from just USD 1.7 trillion in 2014 to USD 18.7 trillion in 2024, and is expected to accelerate further, surpassing USD 33 trillion by 2030. This remarkable growth is driven by clear benefits to consumers and businesses, including higher speeds, reduced transaction costs, improved documentation and security, and easy integration with digital devices. Beyond mere efficiency, the digital payments ecosystem looks set to radically transform the structure and functionality of the financial world through innovative technologies like digital wallets and digital assets.

This financial revolution has not played out uniformly across the world. By contrast, adoption of digital payments in the Asia-Pacific (APAC) region has far outpaced North America (NA). In 2024, digital payments accounted for 81 per cent of e-commerce and 59 per cent of point-of-sale transactions in APAC, compared to just 50 per cent and 19 per cent in NA. Even within Asia, China and India stand out. China tops the globe in transaction volumes, while India leads comfortably in total number of transactions, exceeding 89 billion real-time payments in 2022.

Global digital finance will also increasingly become entangled with broader structures of major power competition, particularly in the Indo-Pacific. Anxiety about Chinese economic influence in Oceania has likely driven India to pitch the Pacific Islands on digital infrastructure, inking an agreement on DPI with Fiji in November 2024.

This runaway dominance reflects more than just population size — both countries have been pioneers of digital payments. In India, the central government has embarked on an ambitious campaign to build and promote “digital public infrastructure” (DPI), developing a set of shared digital systems under the “India Stack” umbrella. These include the Aadhar identification scheme and a real-time payments system, the Unified Payments Interface (UPI). In addition, government-led efforts to increase access to mobile devices and bank accounts laid the groundwork for mass adoption of digital payments.

In comparison to India’s public-first approach, the private sector has played a larger role in promoting digital payments in China. While the People’s Bank of China (PBoC) introduced a centralised clearing corporation in 2018, private payment service providers (PSPs) like Alipay and WeChat Pay have spearheaded development. This aspect of China’s digital payments ecosystem has led to frequent allegations of “walled gardens”, but the Chinese government has actively pushed companies towards greater cross-platform integration in recent years.

The revolution goes global

China and India have also looked to lead the global transition to digital payments and shape the future of the financial system. New Delhi has focused on platform exports, leveraging government-to-government engagement to encourage international adoption of UPI architecture. Digital payments have become a staple agenda item on Indian Prime Minister Narendra Modi’s foreign travels — in fact, UPI was mentioned on all five legs of his recent international trip. The Indian government has also repeatedly taken the opportunity to promote UPI in various multilateral fora, including the G20 and BRICS.

In contrast, China’s tech giants have trailblazed cross-border digital payments. Both governments have facilitated international digital payments for tourism and remittances, but China’s PSPs have innovated via large-scale private sector partnerships, like the 2019 agreement between Alipay and Walgreens. In the latest bid to expand their global footprint, Alipay and WeChat Pay have forayed into cross-border e-commerce with the support of the PBoC. While the National Payments Corporation of India has concluded agreements aimed at tapping international commerce, Chinese platforms like WeChat Pay have launched more successful programs for global merchants, growing to include 64 countries and 25 currencies.

Where will this global contest go from here? China and India will certainly look to exploit the possibilities of cross-border digital finance beyond retail payments — both countries are promoting their currencies for international transaction settlement and exploring the prospects of new technology, like Central Bank Digital Currencies, for international trade.

Global digital finance will also increasingly become entangled with broader structures of major power competition, particularly in the Indo-Pacific. Anxiety about Chinese economic influence in Oceania has likely driven India to pitch the Pacific Islands on digital infrastructure, inking an agreement on DPI with Fiji in November 2024. In recognition of this dynamic, the Quad took tentative steps by releasing a declaration on DPI principles at the 2024 leaders’ summit, and a coterie of Western public and private actors have incorporated digital finance into their economic engagements in the Pacific. If last year’s China-related incident is any indication, international stakeholders will only intensify their efforts ahead of the Pacific Islands Forum annual flagship leaders’ summit this September.

Sub-Saharan Africa represents another key venue for digital payments competition between China and India. The continent will account for a quarter of global population by 2050, and African consumers remain chronically underserved by traditional financial institutions. China has long positioned itself as a leading partner for African countries and now dominates on bilateral trade and development funding. Now, in line with the Digital Silk Road initiative, the Chinese government has embarked on an ambitious digital development agenda in Africa, raising fresh concerns about dependence and interoperability. Meanwhile, Chinese firms like Alipay have looked to invest in the emerging African digital payments market.

For its part, India has carefully cultivated a growing bond with African countries framed through Global South solidarity, as evidenced by the inclusion of the African Union at the G20 Summit in New Delhi and the opening of 16 new diplomatic missions on the continent since 2018. Digital payments increasingly occupy centre stage in India-Africa engagements — during Modi’s July visit to Namibia, the countries confirmed that the Bank of Namibia will roll out a digital payments platform under a licensing agreement with the National Payments Corporation of India. Reports indicate that New Delhi is actively pushing for adoption of the UPI architecture in many African countries, signalling the intense competition to define the future of digital payments on the fastest growing continent.

Toward a new financial order

In the race to dominate global digital payments, the stakes are high. China and India are exporting strikingly different models for digital finance. India’s UPI export campaign broadly privileges interoperability and sovereignty, offering consumers and governments alike a path to a stable, competitive digital finance ecosystem. Meanwhile, China’s bid for primacy in cross-border digital payments — largely via the market penetration of Chinese private sector platforms — is fast becoming a transparency and economic security “headache” for financial regulators around the world. These diverging visions reflect the countries’ respective ambitions to reshape world order: India largely seeks a multipolar system grounded in autonomy, whereas China aspires to an economic future more akin to “dominance by design”.

Global stakeholders should also remain wary of the ways the digital ecosystem might be weaponised against public and private economic interests — the combination of digital currencies and real-time cross-border payment systems will present new challenges with financial crime and sanctions enforcement. For countries in North America and Europe, who have thus far lagged behind the global transition to digital payments, India’s UPI represents a model worthy of emulation. Proactive private and public sector cooperation with India offers a natural opportunity to shape an open and secure global economy in the digital era. Western policymakers now ruing China’s role in contemporary global trade should move with urgency to prevent a similar outcome as the new financial order takes shape.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Andrew Gordan is a Motwani Jadeja US-India Fellow at the Pacific Forum, where he researches Indian tech diplomacy. He also serves as a Junior Fellow in the South Asia Program at The Stimson Center. He received his BA in Government from Harvard and is a recipient of the Boren and Fulbright-Nehru scholarships. Image credit: Nathan Dumlao/Unsplash.