India’s digital payment share has grown over the years and the Unified Payments Interface (UPI) has reached over 750 million transactions daily. Dilip Asbe, MD and CEO of National Payments Corporation of India, which oversees UPI, believes that AI will play a significant role in the next phase of user growth, fraud prevention and credit distribution, aiming to achieve more than one billion daily transactions.
During an interview with TechCrunch at Mumbai Tech Week (MTW) 2026 last month, Asbe said AI could power the next half billion users with NPCI, India’s central bank and the government working together.
“As we look at the next wave of UPI, AI will be used very effectively and this covers all aspects including reaching out to new users. We need to use AI effectively to protect our existing citizens, detect fraud and find mules. Also, AI should be used to provide credit to all users and merchants with digital footprints,” he said. “We need to use AI to look at voice and multilingual solutions to make recruiting easier.”
Many companies have talked about voice as an essential interface in India to chat with companies or systems. Asbe believes it’s early days for this, as voice models need to be more accurate. NPCI launched An interactive system based on a voice assistant in 2023. Asbe noted that adoption for this is yet to happen, and if used correctly, voice could become a critical component in the payment 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 information to ChatGPT to get financial advice. NPCI showed some demos around agent trading and payments with Razorpay last year. However, some of these capabilities have not been more widespread.
The CEO of NPCI believes that with strong regulations and framework, India too can embrace AI-powered finance. That said, there needs to be enough protection and risk mitigation for users — and if something goes wrong, the system needs to be able to look at the user’s instructions and consent to the agent.
In addition to using models, Asbe thinks there is an opportunity to create small language models of India’s financial ecosystem.
“We believe that models will differ based on the data sets they are fed,” he said. “We have a very rich data set in our ecosystem. I think there is a huge opportunity for Indian companies – banks, FinTechs and the ecosystem – to create small language models that are sharp, specific and as deterministic as possible.”
Last year, it introduced a model called NPCI FIMI to resolve user disputes. Asbe noted that it serves more than a million users and is expanding rapidly to remove mandates and resolve issues.
UPI competition
NPCI has been around for a long time UPI sought healthy competition among programshowever, data shows that Walmart-owned PhonePe and Google Pay have more than 80% of the market share. Regulator plan limit an app’s market share to 30% it will enter into force on December 31, 2026, unless the deadline is postponed again.
During the conversation, Asbe said that UPI apps have very low switching costs and most core functions are shared. He noted that PhonePe and Google spent millions on their applications to gain market positions. According to him, if new applications find suitable business models in the fintech ecosystem, their share will increase.
“I believe there are many issues where we see this concentration risk exist, and one of the important reasons is the existence of a viable commercial model. The moment we see a commercial model available to the ecosystem, I believe newer players will start investing very heavily,” Asbe said.
In 2024, the payment authority stopped its activity BHIM UPI app to make it more competitive and increase its usage. Although the transaction volume is increasing, the total market share is about 1%. Asbe said there is no specific target market share that NPCI is expecting with BHIM. But it wants to make it a sovereign and secure alternative to other apps, Asbe said.
India is one of the largest digital economies and investors around the world will be looking at the regulatory landscape to put money into newer fintech solutions and make the market more competitive.
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
