India’s share in digital payments has risen steadily, with the Unified Payment Interface (UPI) reaching above 750 million transactions daily. Aiming to surpass a billion daily transactions, Dilip Asbe, Managing Director and CEO of the National Payments Corporation of India, which manages UPI, believes AI will play a significant role in the upcoming phase for user expansion, fraud detection, and credit allocation.

In a discussion with TechCrunch during Mumbai Tech Week (MTW) 2026 last month, Asbe expressed that AI could facilitate the addition of the next half a billion users with the cooperation of NPCI, the central bank of India, and government entities.

“AI will be utilized very efficiently as we consider the next evolution of UPI, encompassing all elements, including attracting new users. We need to leverage AI smartly to safeguard our existing citizens, detect fraud, and identify mules. AI should also assist in providing credit to all users and merchants who possess digital footprints,” he stated. “We need to harness AI to explore voice and multilingual solutions to simplify the onboarding process.”

Numerous companies have highlighted the significance of voice as a communication interface in India for interacting with businesses or systems. Asbe is convinced that it is still in its infancy, as voice models need to enhance their accuracy. NPCI introduced a voice assistant-based interactive platform in 2023. He acknowledged that adoption has yet to gain momentum, and with the appropriate use case, voice could become an essential element in the payment ecosystem.

AI in finance and regulations

In the United States, both startups and public corporations are racing to integrate AI into finance. Coinbase and Robinhood now permit agents to trade on behalf of users, while OpenAI allows users to upload personal account information into ChatGPT for financial guidance. NPCI demonstrated some applications of agentic commerce and payments with Razorpay last year, yet a broader deployment of these features hasn’t occurred.

The CEO of NPCI believes that India can also embrace AI-driven finance with strong regulations and a structured framework. He emphasized the need for sufficient protections for users and risk management — in the event of an issue, the system should assess the instructions and consent given by the user to an agent.

Aside from model utilization, Asbe perceives an opportunity within the Indian finance landscape to develop small language models.

“We believe that the models will distinguish themselves based on the datasets accessible to them,” he said. “Our ecosystem possesses a rich dataset. I think there is a significant opportunity for Indian firms — banks, FinTechs, and the ecosystem — to create compact language models that are precise, targeted, and as deterministic as possible.”

Last year, NPCI unveiled a model named FIMI to address user disputes. Asbe observed that it is currently assisting over a million users in canceling mandates and resolving issues, and it is scaling rapidly.

UPI competition

NPCI has consistently encouraged healthy rivalry among UPI applications, but statistics indicate that PhonePe, owned by Walmart, and Google Pay control over 80% of the market. The regulator’s initiative to limit an app’s market share to 30% is scheduled to be implemented on December 31, 2026, unless they postpone the deadline again.

During the discussion, Asbe mentioned that UPI applications feature minimal switching costs and most fundamental functionalities are similar. He observed that PhonePe and Google have invested millions in their applications to secure their market standing. He noted that if new applications discover feasible business models within the fintech ecosystem, their market share will increase.

“I believe several factors contribute to this concentration risk, and one of the key reasons is the presence of a viable commercial model. Once we identify a commercial model that works for the ecosystem, I believe new entrants will begin to invest heavily,” Asbe remarked.

In 2024, the payment body spun off its BHIM UPI app to enhance its competitiveness and increase utilization. While transaction volumes have surged, its overall market share rests around 1%. Asbe stated that with BHIM, there’s no specific market share target NPCI is aiming for. However, they aspire to establish it as a sovereign and secure alternative to other applications, Asbe concluded.

India stands as one of the largest digital economies, and global investors are closely observing the regulatory environment to invest in new fintech solutions and elevate market competitiveness.