Survival of the Smartest: Redefining global payments, Ritesh Pai, CEO, International Payments, PhonePe

By Puja Sharma

Winning the payments race through innovation, security and localisation – while making financial inclusion a priority. PhonePe nails it with seamless onboarding, cross-border solutions, and financial literacy.

Digital payments are in flux. Ritesh Pai, CEO of International Payments at PhonePe, discusses the trends he sees shaping the future of international payments and how companies can adapt to remain competitive.

“AI and machine learning are transforming fraud detection, enabling personalised services, and optimising payment routing. Digital wallets and contactless payments are now mainstream, offering consumers secure and hygienic options. Cross-border platforms and APIS simplify global payment integration and enable faster, cost-efficient international transactions.

“Regulatory compliance has become critical, with stricter AML, KYC, and privacy regulations requiring advanced digital identity verification. Instant payments are revolutionising liquidity and cash flow through real-time settlements. Embedded finance integrates financial services directly into platforms, enhancing user experiences and boosting revenue. Security innovations like biometric authentication and tokenisation are essential to safeguarding transactions. Additionally, localised payment methods such as UPI in India or Alipay in China build regional trust.

“Businesses must stay agile, prioritise seamless and secure user experiences, and invest in technologies like AI and blockchain. Collaborating with FinTech and regulators and monitoring global trends are crucial strategies for thriving in the dynamic payments ecosystem.

What are the critical steps to bringing the unbanked into the digital economy?

With 1.9 billion people unbanked globally, the digital payments industry must focus on building digital infrastructure by expanding mobile networks, affordable internet, and low-cost devices through telecom partnerships. Mobile-first solutions, such as wallets, USSD systems, and apps with SMS or voice support, can address gaps in digital literacy. Simplifying KYC processes with biometrics, digital IDs, and mobile-linked systems integrated into national programs can boost accessibility. Lowering transaction costs through P2P platforms and tiered pricing models is crucial for affordability, alongside offering tailored financial products like low-cost savings, microloans, and insurance, using transaction data for credit scoring. Financial literacy initiatives in local languages via SMS, apps, and media can help users adopt digital payments. To foster trust, robust security, transparency, and responsive support are essential. Finally, collaboration with governments on inclusive, innovation-friendly regulations will promote financial inclusion while ensuring consumer protection.

How do payment providers address the challenge of multiple regulatory frameworks?

“Navigating diverse regulatory landscapes while fostering innovation is a major challenge for payment providers. Striking a balance between compliance, security, and innovation requires strategic approaches that allow payment providers to innovate responsibly.

“One effective strategy is adopting modular compliance frameworks, where a core platform ensures AML/KYC compliance while region-specific modules address local regulations. Similarly, Compliance-as-a-Service (CaaS) platforms enable providers to automate regulatory processes like KYC, AML, and fraud detection, allowing companies to focus on innovation while outsourcing compliance.

“AI and machine learning are invaluable for real-time compliance monitoring, fraud detection, and risk management. AI-driven systems enhance accuracy by flagging suspicious transactions across regions while adhering to local regulations. In parallel, regulatory collaboration through initiatives like sandboxes allows payment providers to test new technologies in controlled environments, ensuring alignment with laws before full implementation.

“Technologies like blockchain enhance transparency and security by creating immutable audit trails, simplifying regulatory reporting and improving data integrity. Meanwhile, localised cross-border solutions, such as platforms offering regional payment options, build trust by adhering to specific laws while ensuring seamless user experiences.”

What role can UPI play in cross-border transactions?

“The Unified Payments Interface (UPI) revolutionised payments in India and holds immense potential as a global payment standard. Its low-cost, real-time capabilities can streamline cross-border transactions, reducing costs and delays. By linking with national payment systems in countries like the UAE and Singapore or partnering with global networks like SEPA and SWIFT, UPI can enable instant, affordable international transfers. This could significantly disrupt traditional remittance systems, allowing users to bypass intermediaries and cut fees—for instance, enabling Indian workers abroad to send money home instantly at lower costs.

“UPI can also play a key role in global eCommerce by integrating with international platforms, offering secure, fast payments and enabling merchants to expand their Indian customer base. However, global adoption requires regulatory compliance, including AML and data privacy standards. Collaborative frameworks between regulators and providers will be essential to ensure UPI’s secure and efficient integration into global markets.”

How can digital payment providers empower merchants to adopt digital-first models and credit instruments?

“PhonePe’s success in building a robust merchant network in India highlights strategies for empowering merchants globally in adopting digital-first models. Simplified onboarding processes, requiring minimal technical expertise, reduce barriers to entry. Micro-credit solutions have helped Indian merchants secure working capital, a model that can support SMEs worldwide.

“Financial literacy initiatives, like workshops and tutorials, address knowledge gaps and drive adoption in emerging markets. Strong support systems and a focus on security, including fraud protection, build merchant trust. Localisation, by tailoring solutions to diverse needs like language and connectivity, ensures payment providers can effectively cater to specific market conditions.”

What innovations do you think will define the next phase of personalised and seamless payment experiences?

“AI and data analytics are transforming payments, enabling seamless and personalised experiences. AI-driven personalisation analyses user behaviour to offer tailored products, discounts, and payment methods, boosting engagement and satisfaction, especially during peak seasons. Predictive analytics enhances fraud prevention by detecting irregular activities while ensuring secure, uninterrupted transactions. Biometric authentication, like voice, facial, and fingerprint recognition, adds security and convenience, enabling hands-free payments during shopping or drive-throughs.

AI-powered smart wallets integrate financial data, including loyalty programs and digital currencies, optimising rewards and spending in real-time. Contextual payments use geolocation for locationspecific offers, while dynamic pricing provides personalised discounts, fostering loyalty. Together, these innovations are shaping a future where payments are intuitive, secure, and truly user-centric.”

What is your vision for creating solutions that scale PhonePe’s global presence and set benchmarks for the payments industry?

“As CEO of International Payments, my vision for PhonePe is to drive innovation, localisation, and financial inclusion on a global scale. We aim to build a robust, regionally tailored payment ecosystem that integrates seamlessly with local systems while ensuring regulatory compliance. Leveraging AI and machine learning, we will enable fast, secure, and cost-effective cross-border transactions, delivering personalised services and setting benchmarks in fraud prevention.

Financial inclusion remains at the core, empowering underserved populations with accessible digital solutions. Through strategic partnerships with financial institutions and regulators, we’ll create an interoperable platform that supports open banking and adapts to local markets. By balancing scalability with local relevance, PhonePe aims to be a trusted leader in global payments.”