NPCI Head Says AI Will Play a Key Role in the Next Phase of UPI
AI tools have become widespread across various sectors, ranging from programming to task automation. Now, it appears the National Payments Corporation of India (NPCI) intends to utilise AI tools for the next major phase of UPI, as the digital payment service continues to grow in the country.
NPCI CEO Dilip Asbe indicated that the organisation has ambitious plans to leverage AI for UPI’s growth, particularly regarding new user onboarding. Asbe told a famous publication: “AI will be used very effectively as we tackle the next phase of UPI, and that covers every aspect, including acquiring new users.”
He also noted that voice assistants could make it easier for users to access UPI platforms. Dilip Asbe added: “We need to use AI to explore voice-based and multilingual solutions that simplify the onboarding process.”
The NPCI launched a voice-assistant-based interactive system in 2023, though Asbe acknowledged that its adoption has not yet taken off.
UPI (Unified Payments Interface) was launched in India in April 2016. Since then, it has become one of the country’s most important digital payment systems. Currently, UPI handles over 750 million transactions daily, and the NPCI aims to surpass the one-billion-transaction mark per day.
AI Could Approve Your Loan
The NPCI chief also suggested that AI-powered automated systems could be used to “offer credit” to users and merchants with a “digital footprint.” In other words, an AI system could eventually approve a loan for you. A key concern regarding online transactions is the risk of fraud. Asbe emphasised that the NPCI plans to use AI tools to create better security mechanisms for such transactions. He added: “We must use AI effectively to protect citizens, detect fraud, and identify the intermediaries used for money laundering (known as ‘mules’).” Banks should build AI models, says the NPCI CEO.
Regarding AI models in general, Dilip Asbe believes India’s financial ecosystem has the opportunity to develop small-scale language models. “We have a very rich dataset within our ecosystem. I believe there is a great opportunity for Indian companies—banks, fintechs, and the ecosystem as a whole—to create small language models that are accurate, specific, and as deterministic as possible.”
Asbe’s remarks come as the Reserve Bank of India (RBI) has released draft guidelines requiring the implementation of an emergency “kill switch” mechanism for all AI tools used by the country’s banks and financial institutions.
Asbe added that FIMI, the NPCI’s dispute resolution model launched last year, is already serving over a million users for the cancellation of payment mandates.
The UPI system remains dominated by two major players—PhonePe and Google Pay—which together hold a market share of over 80%. However, the NPCI plans to impose a cap later this year that will limit any single app’s market share to 30%. The NPCI-owned BHIM UPI app holds a market share of around 1%.