India's UPI Eyes AI for Billion Daily Transactions

India's Unified Payment Interface (UPI) is set to leverage Artificial Intelligence (AI) for its next phase of growth, with aspirations to surpass a billion daily transactions. Dilip Asbe, MD and CEO of NPCI, indicated that AI will be instrumental in acquiring the next 500 million users, a goal pursued in collaboration with the government and central bank.

AI's role will extend to safeguarding users by detecting fraud and identifying fraudulent actors. Asbe also highlighted the potential of AI in providing credit to individuals and merchants with digital transaction histories. He further noted the importance of voice and multilingual AI solutions for simplifying the user onboarding experience.

NPCI is exploring AI applications beyond user acquisition, including agentic commerce and payments. Asbe believes that with robust regulations, India can effectively adopt AI in finance, ensuring user protection and risk mitigation. He also sees a significant opportunity for Indian companies to develop specialized small language models tailored to the nation's rich data ecosystem.

The NPCI is also addressing market concentration in UPI apps, where PhonePe and Google Pay dominate. A planned 30% market share cap for apps, set to take effect on December 31, 2026, aims to foster competition. Asbe suggested that viable business models are key to encouraging new players to invest and gain market share.