The share of digital payments in India has been increasing year by year, with more than 750 million UPI-day transactions. To reach the target of 1 billion transactions per day, the Managing Director and Chief Executive Officer of the Indian National Payments Corporation (NPCI), which oversees UPI, Dilip Asbe, believes that AI will play an important role in the next phase of user growth, fraud prevention and credit allocation.
In an interview with Dilip Asbe, it was stated that AI could promote the addition of 500 million users with the joint efforts of NPCI, the Central Bank of India and the Government. He said, “When we look at the next wave of UPI, AI will play a very effective role, covering, inter alia, the expansion of new users. We must make effective use of AI to protect existing citizens, fight fraud and find money mules. AI must also be used to provide credit to all users and businesses with a digital footprint. We must also use AI to study voice and multilingual solutions to simplify the user registration process.”
Many companies have spoken of the importance of voice as an interactive way of communicating with companies or systems in India. Dilip Asbe believes, however, that the voice interaction is at an early stage because the voice model needs to be more accurate. NPCI launched an interactive system based on voice assistants in 2023. Dilip Asbe stated that the system had not achieved expectations, but that, if applied properly, voice could be a key component of the payment ecosystem.
In the United States, both start-ups and listed companies compete for the financial integration of AI. Coinbase and Robinhood now allow proxy transactions on behalf of users, and OpenAI allows users to load personal account data into ChatGPT to obtain financial advice. In cooperation with Razorpay last year, NPCI presented some demonstrations on proxy commerce and payments. However, some of these functions have not yet been expanded.
The NPCI CEO believes that AI-driven financial technology can also be used in India as long as there is a sound regulatory and regulatory framework. He indicated that users should be provided with adequate protection and mitigation of risks — the system should be able to view the instructions and authorizations given by users to agents in case of problems.
In addition to the use of models, Dilip Asbe believes that the Indian financial ecosystem has the opportunity to build small-linguistic models. “We believe that these models will be differentiated according to the data set available”, he said. “Our ecosystem has very rich data sets. I believe that Indian enterprises, including banks, financial technology companies and the ecosystem as a whole, have a great opportunity to create a small voice model that is precise, specific and as stable as possible.”
Last year, NPCI launched a model called FIMI to resolve user disputes. Dilip Asbe stated that it was providing services to over 1 million users to help them with de-authorization and problem-solving and was expanding rapidly.
NPCI has long sought healthy competition between UPI applications, but data show that the Wal-Mart PhonePe and Google Pay hold over 80 per cent of the market share. The regulator limited the plan to 30 per cent of the applicable market share and, if not unexpected, the plan will enter into force on 31 December 2026.
Dilip Asbe states that PhonePe and Google have already invested millions of dollars under the banner to maintain their market position. He said that their share would rise if new applications were to find viable business models in the financial, scientific and technological ecosystems. “I believe that there are many reasons for this concentration of risk, one of the important factors being the lack of viable business models. Once this business model is in place in the ecosystem, I believe that new players will invest heavily.”
In 2024, NPCI stripped its BHIM UPI application to enhance its competitiveness and expand its users. Although BHIM transactions have increased, their overall market share is only about 1 per cent. Dilip Asbe stated that the NPCI did not set a specific target market share for BHIM, but rather wanted it to be a stand-alone and secure payment application to replace other similar applications.