India’s National Payments Corporation of India (NPCI) is preparing to integrate artificial intelligence across the Unified Payments Interface (UPI) ecosystem to accelerate user adoption, strengthen fraud detection, and enable AI-driven financial services. NPCI CEO Dilip Asbe said AI will play a central role in expanding UPI beyond its current scale, with voice-based onboarding, multilingual interfaces, automated lending, and smarter fraud prevention among the key focus areas.
The initiative comes as UPI processes more than 750 million transactions every day, with NPCI targeting over one billion daily transactions in the coming years.
Despite UPI’s rapid expansion, NPCI believes AI can help remove barriers for new users, particularly those who are more comfortable using regional languages and voice interactions. Asbe said AI-powered voice assistants and multilingual capabilities will simplify onboarding and make digital payments more accessible across India.
NPCI has already experimented with voice assistant technology, launching an interactive voice-based system in 2023, although adoption has so far remained limited.
Beyond customer onboarding, NPCI also sees AI playing a significant role in digital lending. Asbe suggested that AI models could analyse users’ digital transaction histories to help banks and financial institutions assess creditworthiness and provide faster access to loans for both consumers and merchants.
Fraud prevention is another major priority. NPCI plans to use AI to strengthen transaction monitoring, detect fraudulent activity more effectively, and identify mule accounts used in financial crime, helping improve security across the UPI ecosystem.
Asbe also encouraged India’s banking and fintech sector to develop specialised small language models trained on domestic financial data. Rather than relying solely on large general-purpose AI models, he believes focused, deterministic AI systems could better support banking operations and regulatory requirements.
The comments come as India’s financial regulators continue to develop AI governance frameworks. The Reserve Bank of India has proposed draft guidelines that would require banks and financial institutions to implement safeguards, including kill switch mechanisms, for AI-powered systems.
Meanwhile, NPCI continues to expand its digital infrastructure. Its dispute resolution platform, FIMI, launched last year, is already supporting more than one million users for mandate cancellation requests.
UPI remains heavily concentrated, with PhonePe and Google Pay accounting for more than 80% of the market. NPCI is expected to introduce a 30% market share cap for individual payment apps later this year to encourage greater competition within the ecosystem.
What this means
- AI is becoming a strategic layer for the future evolution of UPI, extending beyond payments into onboarding, lending and fraud prevention.
- Voice-enabled and multilingual AI could significantly expand digital payment adoption across underserved populations.
- Banks may increasingly deploy AI-driven credit assessment using transaction data to accelerate lending decisions.
- NPCI is encouraging financial institutions to develop specialised AI models tailored for banking rather than relying solely on general-purpose models.
- Stronger AI governance and fraud detection will be critical as UPI scales towards processing more than one billion transactions per day.
