Q-day is coming - Bharat’s Online Payment Industry Leadership in the Quantum Era

Bharat has already demonstrated remarkable digital leadership globally through UPI's 10+ billion monthly transactions. The quantum era is another frontier where we can lead.

Quantum computing (QC) will redefine the $2.2 trillion global payment landscape, bringing both unprecedented opportunities and challenges for the global payments landscape. While QC threatens current encryption standards such as RSA (Rivest–Shamir–Adleman) and ECC (Elliptic Curve Cryptography), it also offers Bharat the chance to pioneer next-generation secure payment systems that could set global benchmarks. In this article, we examine QC's implications for Bharat and outline a roadmap for the payment ecosystem.

Quantum Threats: A Clear Challenge to Bharat
Bharat's UPI systems currently use robust encryption standards like RSA-2048 and AES-256—but the advent of quantum may pose a challenge for it. Quantum algorithms such as Shor’s Algorithm can decrypt asymmetric encryption algorithms like RSA-2048. Similarly, Grover’s Algorithm weakens symmetric encryption algorithms like AES-256, making brute-force attacks by malicious attackers more feasible.

Cybercriminals have embarked on a policy of "harvest now, decrypt later" strategy. So, cybercriminals can store encrypted transaction data today and decrypt it once QC becomes powerful enough. These vulnerabilities pose significant risks to the payment industry, including large-scale breaches of Bharat’s UPI, IMPS and NPCI systems. This could lead to disruption of services and immense loss to citizens and the banking system. To mitigate these threats, Bharat must transition to quantum-resistant cryptography (QRC).

Opportunities for Bharat: How QC Can Transform Payments

QC isn't just a threat—it's a competitive lever. Faster and more efficient transactions are also possible, as quantum-optimized algorithms can dramatically reduce settlement times for UPI transactions. The European Central Bank’s TARGET Instant Payment Settlement (TIPS) system demonstrated latency reductions to under one second in quantum-secure trials.

QC enhances fraud detection by analysing vast datasets in real-time, significantly improving accuracy and reducing false positives. For instance, JPMorgan Chase in partnership with IBM, achieved 30% reduction in false positives. Similarly, NPCI can run Artificial Intelligence (AI) models on QC to reduce fraudulent UPI transactions.

Furthermore, transitioning to post-quantum cryptographic (PQC) standards is crucial. Leading PQC approaches include lattice-based cryptography (CRYSTALS-Kyber), hash-based signatures (SPHINCS+), and code-based encryption (Classic McEliece). Reserve Bank of Bharat (RBI) is exploring quantum-secure frameworks for digital currency (e₹), positioning Bharat ahead of many global counterparts. This in line with Mastercard’s foray into piloting quantum-resistant lattice-based encryption to secure credit card transactions against future quantum threats.

Global Readiness: How Different Regions Are Adapting

Governments and financial institutions worldwide are preparing for the quantum shift. In North America, the US Federal Reserve is testing quantum-secure messaging for interbank transactions. While Toronto-Dominion Bank in Canada is investing in QC for financial modelling. In Europe, the European Central Bank mandates quantum-resistant encryption across financial networks by 2026. While UBS in Switzerland is testing quantum-secure
cross-border payment systems. The Asia-Pacific region sees China’s digital yuan (e-CNY) already incorporating post-quantum security. While Bharat’s UPI 2.0 is expected to incorporate quantum-resistant upgrades by 2025-26. Meanwhile, emerging markets such as Africa’s M-Pesa and Latin America’s Pix system still rely on traditional encryption, making them vulnerable to quantum threats unless they transition swiftly.

Strategic Roadmap for Bharat
Our world-class UPI infrastructure provides the perfect foundation to integrate quantum-resistant technologies. To further enhance Bharat’s payment ecosystem, RBI should mandate QRC compliance for UPI and IMPS by 2026, while MeitY accelerates the National Quantum Mission with ₹10,000+ crore funding. Establishing a quantum sandbox will allow controlled testing of new security protocols, ensuring a smooth transition to post-quantum security
standards.

Banks and FinTech’s must immediately adopt hybrid encryption models (RSA + lattice-based Kyber) by 2025 as a transitional safeguard. Strategic partnerships with IITs, IIMs, and ISRO will drive indigenous quantum R&D. While targeted training programs should prepare 10,000+ cybersecurity experts in QRC by 2027.

The legacy information systems in the banking sector of Bharat should upgrade to quantum-secure infrastructure. IBM's Osprey processor (433 qubits) continues to experience error rates of just 1-2% per operation. Regulatory mandates should ensure that the banking system quickly responds to PQC adoption.

Additionally, Indian FinTech’s should start investing in skill building for creating quantum-capable teams. Institutions (such as IITs and IIMs) should provide more QC courses to develop a pool of professionals who can hit the ground running.

Finally, banks should actively comply with RBI-approved quantum-secure payment options. These steps will ensure faster adoption of quantum-resistant technologies across Bharat's financial ecosystem.

Conclusion: Bharat Must Lead the Quantum Transition
Bharat has the opportunity to set quantum security standards for the Global South, export quantum-proofed payment tech as our next software success, and demonstrate how emerging economies can lead technological transitions.
The same innovative spirit that built UPI, can secure our quantum future. By acting decisively, we can make quantum readiness our next competitive advantage, just as we did with instant payments.

Q-day isn't coming—it's already here and Bharat can help shape it.