India's Payments Chief Foresees AI as Key to Next Digital Payment Growth Era

India's digital payment landscape has witnessed remarkable growth over the years, with the Unified Payment Interface (UPI) now handling over 750 million daily transactions. Looking ahead, Dilip Asbe, MD and CEO of the National Payments Corporation of India (NPCI), the body overseeing UPI, believes that Artificial Intelligence (AI) will be instrumental in driving the next phase of expansion. This future growth is envisioned to encompass user acquisition, robust fraud prevention, and efficient credit distribution, with a target of exceeding one billion daily transactions. During an interview at Mumbai Tech Week 2026, Asbe highlighted AI's potential to onboard an additional half a billion users, a goal that would require collaborative efforts from NPCI, India's central bank, and the government. He emphasized that AI's role would be comprehensive, extending to protecting existing citizens from fraud and identifying illicit financial activities. Furthermore, AI is expected to facilitate credit provision for users and merchants with established digital footprints, and to simplify onboarding processes through advanced voice and multilingual solutions. While the concept of voice as an interface for interacting with financial systems holds significant promise in India, Asbe cautioned that it is still in its nascent stages. He noted that voice models require greater accuracy to achieve widespread adoption. Despite NPCI having launched a voice assistant-based interactive system in 2023, its uptake has yet to accelerate. Asbe remains optimistic, however, believing that with the right use case, voice technology could become a critical component of the payment ecosystem. Globally, companies are actively integrating AI into finance, with examples like Coinbase and Robinhood enabling agents to trade on users' behalf, and OpenAI offering financial advice via ChatGPT. NPCI has also showcased agentic commerce and payment demos with Razorpay, though these capabilities have not yet seen a broad rollout. Asbe stressed that for India to fully embrace AI-powered finance, a strong regulatory framework is essential, ensuring ample user protection, effective risk mitigation, and clear mechanisms to trace user instructions and consent given to AI agents. Beyond the application of existing AI models, Asbe sees a significant opportunity for the Indian financial ecosystem to develop its own small language models (SLMs). He posits that the differentiation among models will stem from the quality and specificity of their data sets. Given India's rich and diverse data ecosystem, he believes that local banks, FinTechs, and other players can create SLMs that are precise, specific, and highly deterministic, catering uniquely to the Indian market's needs. NPCI's commitment to innovation is further demonstrated by its FIMI model, launched last year to resolve user disputes. This system is already serving over a million users, assisting with mandate cancellations and issue resolution, and is experiencing rapid scaling. Meanwhile, NPCI continues to foster healthy competition among UPI apps, even as Walmart-owned PhonePe and Google Pay collectively command over 80% of the market. The regulator's plan to cap an app's market share at 30% is slated for December 31, 2026, a move that could reshape the competitive landscape and encourage new entrants to find viable business models within this dynamic ecosystem.