India’s Unified Payments Interface (UPI) is one of the world’s most widely adopted real-time payment systems. Designed for speed, interoperability, and inclusion, UPI now processes over 640 million transactions daily, including more than 18 billion transfers in June 2025 alone, surpassing Visa in volume.

As UPI extends its global footprint, with integrations in countries like Singapore, France, and the United Arab Emirates, it highlights a critical challenge: navigating complex international AML obligations across diverse jurisdictions.

Unlike domestic systems, cross-border payments must comply with multiple regulatory frameworks, each with its own anti-money laundering (AML) rules, reporting obligations, and data standards. Real-time payments add urgency, leaving less time for compliance teams to identify risks and act on them. 

UPI’s Cross-Border Expansion

As UPI moves into new markets, it brings real-time payments into closer contact with global regulatory and operational complexity. 

Why UPI appeals for cross-border payments 

Launched in 2016 to modernise domestic payments and promote financial inclusion, UPI quickly gained traction for its real-time functionality, mobile-first experience, and zero-cost usage for consumers. Built with open architecture, it enables interoperability across banks and fintechs, features that have made it increasingly attractive for cross-border integrations.

Many real-time payments systems are national or regional. FedNow, which launched in 2023, is designed for domestic instant payments in the United States. In Europe, the Single Euro Payments Area (SEPA) Instant supports real-time euro transfers within the European Union and the European Economic Area. 

UPI, however, is expanding beyond India’s borders. It is now connected with Singapore’s PayNow system, allowing users to move money between countries without relying on card networks or correspondent banking rails. It also has merchant acceptance partnerships in countries like France, the United Arab Emirates, and Qatar, with plans to expand to twenty countries by 2029. As more payment systems link directly in real time, fresh challenges are emerging around how compliance, monitoring, and regulatory oversight can respond at the same speed.

Navigating the International AML Landscape

Cross-border payments must meet distinct AML requirements, shaped by local laws, supervisory practices, and data governance rules.

UPI’s AML compliance challenge 

As UPI expands into new markets, participants must meet strict Know Your Customer (KYC) sanctions screening, monitoring, and reporting standards, all while adapting these controls to real-time processes, where decisions must be made quickly.

The task is complicated by inconsistencies across jurisdictions. Customer verification standards may differ, creating entry points for illicit actors. Additionally, varying data localisation rules and cross-border access restrictions can complicate how sanctioned entities, politically exposed persons (PEPs), and ultimate beneficial owners (UBOs) are screened and identified.

The speed and scale of instant transactions increase exposure to common AML risks such as structuring and smurfing, which involve breaking large sums into smaller transfers to avoid detection, and layering, where funds are rerouted through complex channels to hide their origin. 

The speed of real-time cross-border payments leaves financial institutions with little time to detect anomalies, increasing the pressure to screen, flag, and report suspicious activity accurately and immediately.

What global AML standards require

The Financial Action Task Force (FATF) sets the global standards for AML and counter-terrorism financing. While its recommendations shape international expectations, each jurisdiction enforces its own legal and regulatory frameworks, including how due diligence, screening, and suspicious activity are handled. A core FATF principle is the risk-based approach, which calls for customer due diligence and ongoing monitoring tailored to the level of risk each relationship poses.

FATF’s Recommendation 16, known as the Travel Rule, requires that cross-border transfers include complete originator and beneficiary information from end to end, in an effort to enable receiving financial institutions to screen and block high-risk transactions. FATF’s recent amendments strengthen these obligations: structured data fields and beneficiary-name validation are increasingly expected for cross-border transfers,  raising the bar for real-time payment systems.

Real-Time Payments and Real-Time Risk

The speed of real-time payments is challenging traditional compliance operations and demanding new technical capabilities. 

The compliance lag in real-time payments 

​​UPI transactions now settle in 10–15 seconds on average, significantly faster than earlier processing speeds. As settlement times shrink, compliance systems must match the speed of payments. Many legacy architectures, built for periodic batch environments, were not designed to support continuous, real-time data flows. Internal integration gaps and manual review dependencies can still create delays that don’t align with instant settlement.

Criminals exploit these gaps, taking advantage of instant payment speeds and inconsistent KYC controls across jurisdictions to conduct regulatory arbitrage. Bad actors push through social engineering scams or move funds using synthetic identities before detection systems can respond.

As volumes scale, monitoring for anomalies in fast, low-value, high-velocity environments requires purpose-built infrastructure. To keep pace, compliance must shift from reactive to proactive defences that are increasingly supported by advanced technologies.

Building AML compliance systems for real-time risk 

As UPI integrates with more international networks, it places new demands on AML systems still designed for slower environments. Real-time payments require equally real-time compliance,  not delayed decisions.

Effective compliance in this context depends on dynamic, risk-based transaction monitoring supported by current sanctions data, real-time watchlist updates, and intelligent detection capabilities. Sanctions screening must be embedded directly into payment flows, especially when decisions must be made in seconds. Integrating fraud and AML monitoring helps catch overlapping threat patterns across use cases. Proper calibration is essential as fuzzy matching can generate excessive false positives, overwhelming review teams and slowing real-time response.

Technically, this requires low-latency APIs and systems that can act on data quickly, and infrastructure built to support high-volume activity across multiple regulatory environments, not siloed screening systems that can’t operate at real-time scale.

The Path Forward

As payment systems like UPI expand beyond domestic borders, their ability to scale will depend on how well financial institutions manage AML and financial crime risk in real time. Compliance systems must evolve to keep pace,  not only with transaction speed, but also with regulatory expectations across jurisdictions.

​​Facctum supports this shift with a platform built for real-time financial crime risk management. Designed to screen transactions at speed and scale, our solutions help financial institutions identify threats as they emerge, using current sanctions data, adaptive detection, and integrated monitoring.

By aligning with global AML standards and embedding into existing compliance workflows, Facctum enables faster decision-making, reduced false positives, and stronger oversight across high-volume, high-velocity environments.

Contact us to learn how Facctum can support your real-time AML compliance strategy.