India’s Unified Payments Interface (UPI), currently processing over 750 million daily transactions, aims to reach one billion transactions daily by leveraging AI technology, according to NPCI CEO Dilip Asbe.
- AI to enhance fraud prevention, credit, and voice onboarding on UPI
- PhonePe and Google Pay dominate over 80% of UPI transaction volume
- Regulatory cap on market share set for end-2026 to foster competition
What happened
India’s NPCI, the body overseeing the Unified Payments Interface (UPI), announced plans to utilize artificial intelligence to drive UPI’s growth from 750 million to one billion daily transactions. Dilip Asbe, NPCI’s CEO, detailed how AI will be critical for fraud detection, extending credit to users and merchants with digital footprints, and enabling multilingual voice onboarding.
While voice-assisted payments were introduced in 2023, widespread adoption is pending improvements in voice model accuracy. NPCI has also developed AI models like FIMI to streamline user dispute resolution, already assisting over a million users. These initiatives align with India’s broader push towards local AI development and sovereignty.
Why it matters
UPI has rapidly become a cornerstone of India’s digital economy, with main players PhonePe and Google Pay controlling more than 80% of transactions. This market concentration has drawn regulatory scrutiny, leading to an upcoming cap of 30% maximum market share per app by December 31, 2026, intended to diversify the ecosystem and reduce dependency on a few dominant players.
Integrating AI could lower operational risks through better fraud detection and support financial inclusion by providing credit access to underserved digital users. It also offers potential for safer, more user-friendly onboarding through voice technologies tailored to India’s many languages, supporting NPCI’s goal of sustainable growth and resilience in digital payments.
What to watch next
Stakeholders will closely monitor AI advancements driving fraud prevention and credit services within UPI, as well as improvements in voice payment adoption, which could unlock access for less tech-savvy users and expand digital payments across India’s diverse population. The development of small, locally relevant AI language models presents a unique innovation opportunity within the payments space.
Regulatory enforcement of the market share cap by the end of 2026 will be crucial in reshaping competitive dynamics, potentially encouraging new entrants and business models. NPCI’s own BHIM app, currently holding about 1% of the market, may serve as a sovereign digital payments option as India scales its digital economy and AI infrastructure ambitions.