India’s payments body eyes AI to drive next half-billion users

India’s digital payment ecosystem is preparing for its next phase of expansion. The Unified Payment Interface (UPI), the country’s instant real-time payment system, has grown to over 750 million daily transactions, with an ultimate target of reaching over a billion daily transactions. To achieve this, Dilip Asbe, the MD and CEO of the National Payments Corporation of India (NPCI), which oversees UPI, thinks AI would be heavily involved in driving user growth, fraud prevention, and credit distribution. Speaking during an interview with TechCrunch at Mumbai Tech Week (MTW) 2026 last month, Asbe stated that AI could drive the next half a billion users.

According to Asbe, the technology will play a critical role in securing the network as it scales. “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 must use AI effectively to protect our current citizens, to find fraud, and to find mules. AI must also be used to provide credit to all the users and merchants who have digital footprints,” Asbe said.

While pushing for AI-driven growth, the regulator is also managing market concentration. Currently, PhonePe and Google Pay control over 80% of the market share. The regulator’s plan to cap an app’s market share at 30% is set to take effect on December 31, 2026, unless it defers the deadline again. In 2024, the payment body spun off BHIM, a UPI-based payment app developed by NPCI, though its market share is around 1%. Asbe believes this concentration risk exists partly due to the lack of a viable commercial model, suggesting that newer players will invest heavily once such a model is available.

Beyond policy, NPCI is exploring small language models and voice interfaces. Although NPCI launched a voice assistant-based interactive system in 2023, Asbe noted that voice models need to be more accurate before becoming a critical component in the payment ecosystem. He believes the Indian finance ecosystem has an opportunity to build sharp, deterministic small language models, noting that these models will differentiate from each other based on the datasets made available to them. This focus on AI comes as U.S. companies like Coinbase, Robinhood, and OpenAI use AI in finance, and follows NPCI’s agentic commerce and payments demos with partner Razorpay.

Why it matters

The NPCI is attempting to balance aggressive AI-driven expansion for financial inclusion with regulatory efforts to curb market concentration among dominant payment apps.