UPI payments on smartwatches: what to expect next for tap-to-pay

India's Unified Payments Interface has reshaped how a billion people move money, processing more transactions annually than Visa and Mastercard combined in many quarters. The next chapter for that rail is moving off the phone and onto the wrist, with smartwatches positioned to become a pocketless way to pay at kirana stores, toll plazas, and metro gates. While the rollout is being driven by Indian banks and OEMs, the technology has global implications, including for Australian travellers, fintech developers, and anyone watching the contactless payments race.

For Australians used to tapping with a phone or a plastic card, the UPI-on-wearable concept might sound familiar at first glance. The execution, however, differs sharply from Apple Pay or Google Pay. UPI leans on QR codes, mobile numbers, and virtual payment addresses rather than tokenised card credentials, which means a smartwatch needs to handle a different conversation with the merchant terminal. Understanding that difference matters for anyone evaluating wearable payment platforms beyond the incumbents.

The UPI rail in 2025

UPI began as a phone-to-phone transfer system built by the National Payments Corporation of India and a consortium of banks. It now handles everything from street-vendor purchases to EMI payments, and its monthly volume runs into the billions of transactions. Crucially, the system was designed for low-cost smartphones, intermittent networks, and users who may not own a debit or credit card. That accessibility is exactly why extending UPI to wearables is more compelling than simply copying a Western wallet onto a watch face.

Recent policy moves have also opened the door. The Reserve Bank of India has allowed UPI to be used for credit lines, and the interface now supports recurring mandates, invoice-linked payments, and offline transactions. Each of those expansions is relevant to smartwatches, because a wrist-bound device is often used in quick, glance-and-go situations where pulling out a phone feels like overkill.

Why smartwatches make sense

Smartwatches already know what time it is, how fast you're moving, and how well you slept. Adding payments turns them into a second identity layer, one that lives on the body rather than in a bag or pocket. For runners, cyclists, and gym-goers in cities like Sydney or Melbourne, leaving a phone behind during a workout is common. A watch that handles a post-run flat white at the café without breaking stride is a meaningful upgrade over carrying a phone in an arm strap.

There is also a hygiene angle that became harder to ignore after the pandemic. Tapping a wrist against a terminal is faster than fishing out a phone, unlocking it, authenticating, and waiting for the NFC handshake to complete. On busy Brisbane ferries or packed Melbourne trams, that fraction of a second per passenger adds up. The form factor is also less prone to the "phone-down-on-the-counter" forgetfulness that plagues mobile wallets. Connectivity matters here too, since payment confirmation depends on the watch or its paired phone being online; for shoppers in regional centres, Wi-Fi 7 routers and better home mesh setups are making it easier to keep paired devices snappy even when stepping away from a desk.

Under the hood: how a watch speaks UPI

The technical backbone is a combination of secure elements, tokenisation, and the UPI bridge APIs that NPCI exposes to device makers. When a user pairs a UPI-enabled wearable with a companion app on a phone, the watch receives a tokenised payment credential tied to a specific bank account. At the till, the watch presents this token over NFC, and the merchant's terminal routes the request through the same acquirer networks that handle standard card taps.

The key divergence from Apple Pay or Google Pay is what happens after the tap. With a card-style token, the terminal talks to the card network. With UPI, the terminal (or its QR replacement) talks to NPCI, which then settles with the user's bank. Some implementations use a dynamic QR displayed on the watch face, scanned by the merchant. Others rely on NFC plus a biometric confirmation on the watch, similar to how some fitness bands already authenticate a contactless transaction.

A useful side note: the same secure-element hardware that powers wearable payments also powers offline authentication for transit, building access, and even some identity verification scenarios. That overlap is why device makers and payment apps see smartwatches as a hub rather than a single-purpose gadget.

The brands racing to ship

Indian OEMs have moved faster than their global counterparts on UPI wearables. Noise, boAt, Fire-Boltt, and Amazfit have all announced or shipped watches with built-in UPI, often through partnerships with ICICI, HDFC, or Axis Bank. Samsung has extended its existing wallet to support UPI on Galaxy Watches sold in India, and Apple has not yet commented on whether watchOS will gain UPI integration beyond the existing card-on-file tokenisation it already offers in the country.

Internationally, Garmin and Fitbit (now under Google) have been quieter, though both have the hardware capability to add UPI tokens if the business case makes sense. For Australian consumers reading the news from Sydney, the relevant takeaway is that any wearable bought in India today may or may not work with UPI when brought home, because the tokenisation is tied to a specific issuer and country.

What it means for Australians

Direct UPI support in Australia is unlikely in the near term, because local acquirers and merchants do not yet route to NPCI. The underlying trend still affects Australians in three concrete ways, though. First, travellers heading to India can leave the wallet in the hotel safe and rely on a paired watch for most purchases, much as they would rely on a phone today. Second, Australian fintechs watching the UPI model are borrowing ideas for the New Payments Platform, including the PayID lookup system and the BPAY-style mandate flows that already exist locally.

Third, the competitive pressure on Apple Pay and Google Pay is real, and Australian retailers like JB Hi-Fi, Officeworks, and the major supermarkets are likely to see more payment diversity in the next few years. If a tourist in Parramatta can tap a watch to pay for a servo snack while their phone stays in a backpack, the precedent for local rollout becomes clearer. The same rails are being explored for entertainment and gaming payments too, with betting apps in India already routing microtransactions through UPI, a hint of how flexible the protocol can be in adjacent verticals.

Security, privacy, and the usual concerns

Wearable payments inherit the same security posture as phone wallets, with a few extras. The secure element stores the token, the watch requires a PIN or biometric for high-value transactions, and the device can be remotely wiped if lost. UPI adds another layer: every transaction references the user's virtual payment address or mobile number, so a stolen token alone cannot drain an account without the bank's authentication flow.

Privacy advocates in India have raised concerns about the data UPI collects, including metadata about merchant visits and timing. Those concerns will travel with the technology if it expands abroad. Australian regulators at the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission have already shown interest in payment-data portability, so any local UPI equivalent would face a different but parallel rule book.

There is also the question of what happens when the watch battery dies mid-day. Most UPI implementations allow a fixed number of offline taps before re-authentication is required, similar to the offline card limits in Europe. Users who treat the watch as their primary payment device should plan for a low-battery escape hatch, whether that means carrying a card, a small amount of cash, or a backup phone.

Rollout timeline and what to watch

The first wave of UPI-on-wearable devices is already on Indian shelves, with broader bank partnerships expected through 2025 and 2026. NPCI has signalled that wearables will be treated as a distinct device category within its certification framework, separate from phones and cards. That distinction matters because it determines what level of KYC, authentication, and dispute resolution applies.

For Australians, the most useful indicators are not Indian launch dates. Instead, watch whether Visa and Mastercard in Australia deepen their tokenisation work with local banks, whether the Reserve Bank's pilot programs include wearable-specific guidance, and whether any major OEM launches a watch that supports both UPI (for travel) and eftpos or PayID (for home use). Detailed coverage of these crossovers tends to show up first in consumer tech reviews, which is where Aussies tend to weigh up feature lists before committing to a wearable.

The short version is that India is building a wearable payment rail that is genuinely different from the card-on-file model most Australians know. Whether that rail extends to the southern hemisphere in a direct sense or merely influences how local banks and OEMs approach the wrist, the direction of travel is clear. A watch is no longer just a notification screen or a fitness tracker; it is increasingly a wallet you forget you're wearing.