India’s digital payments share has grown over the years, with the Unified Payments Interface (UPI) growing to over 750 million daily transactions. Aiming to reach over one billion daily transactions, Dilip Asbe, MD and CEO of National Payments Corporation of India, which oversees UPI, believes that AI will play a major role in the next phase for user growth, fraud prevention and credit distribution.
During an interview with TechCrunch at Mumbai Tech Week (MTW) 2026 last month, Asbe said AI could drive the next half billion users with NPCI, India’s central bank and the government working together.
“AI will be used very effectively when we look at the next wave of UPI, and that includes all aspects, including reaching new users. We need to use AI effectively to protect our current citizens, find fraud and find moles. AI should also be used to provide credit to all users and merchants who have digital footprints,” he said. “We need to use AI to look at voice and multilingual solutions to make onboarding simpler.”
Many companies have talked about voice as an interface being important in India to chat with companies or systems. Asbe believes it’s too early for that, as voice models will need to be more accurate. NPCI started an interactive voice assistant based system in 2023. Asbe noted that adoption of this has yet to take off, and with the right use case, voice can become a critical element in the payments ecosystem.
AI in finance and regulation
In the US, startups and public companies are racing to add AI to funding. Coinbase and Robinhood now allow agents to trade on behalf of users, and OpenAI lets you upload personal account data to ChatGPT to get financial advice. NPCI did some merchant and merchant payment demonstrations with Razorpay last year. However, some of these features have not been widely available.
The CEO of NPCI believes that with strong regulations and a framework, India can also adopt AI-based finance. He said there should be enough protection for users and risk mitigation — and in case something goes wrong, the system should be able to consider the instructions and consent the user gives to an agent.
Apart from using models, Asbe believes that the Indian financial ecosystem has an opportunity to model small languages.
“We think the models will differentiate each other based on the data sets that are available,” he said. “We have a very rich data set in our ecosystem. I think there is a big opportunity for Indian companies – banks, FinTechs and the ecosystem – to build small language models that are sharp, specific and as deterministic as possible.”
Last year, NPCI introduced a model called FIMI to resolve user disputes. Asbe noted that it serves more than a million users to cancel orders and resolve issues and is scaling quickly.
UPI Contest
NPCI has long sought healthy competition among UPI apps, but data shows that PhonePe and Walmart-owned Google Pay hold over 80% market share. The regulator’s plan to limit an app’s market share to 30% is set to take effect on December 31, 2026, unless it pushes back the end date.
During the conversation, Asbe said that UPI apps have very low switching costs and that most of the basic functions are common. He noted that PhonePe and Google have poured millions into their apps to gain a foothold in the market. He said if new apps find viable business models in the fintech ecosystem, their share will grow.
“I think there are a lot of issues where we see this risk of concentration, and one of the big reasons is the availability of a viable business model. Once we see the business model available in the ecosystem, I think the younger players will start investing very heavily,” Asbe said.
In 2024, the paying agency withdrew BHIM UPI app to make it more competitive and increase its usage. While its trading volume has increased, its overall market share is around 1%. Asbe said that with BHIM, there is no specific market share that NPCI is looking at. But he wants to make it a mainstream and safe alternative to other apps, Asbe said.
India is one of the largest digital economies and investors around the world will look at the regulatory landscape to invest money in newer fintech solutions and make the market more competitive.
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