India’s digital payment landscape is undergoing a monumental transformation, with the Unified Payment Interface (UPI) emerging as a global benchmark for instant, interoperable transactions. Surpassing 750 million daily transactions, the system is now setting its sights on an ambitious target of over a billion daily transactions. At the heart of this vision is Dilip Asbe, MD and CEO of the National Payments Corporation of India (NPCI), the architect behind UPI. Asbe believes that Artificial Intelligence (AI) will not just be a supplementary tool but a core driver in achieving this next phase of growth, fundamentally reshaping user acquisition, fortifying fraud prevention, and revolutionizing credit distribution across the nation.
During an exclusive interview with TechCrunch at Mumbai Tech Week (MTW) 2026, Asbe detailed how AI, in synergy with NPCI, India’s central bank, and the government, is poised to onboard the next half a billion users onto the UPI platform. His insights paint a vivid picture of a future where AI permeates every layer of the digital payment ecosystem, making it more intelligent, secure, and inclusive.
“AI will be used very effectively when we look at the next wave of UPI, and that includes all aspects, including reaching new users,” Asbe articulated. “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. We must use AI to look at the voice and multilingual solutions to make onboarding simpler.” This comprehensive strategy underscores AI’s potential to not only expand reach but also to deepen trust and unlock new financial opportunities for millions.
While many companies have championed voice as a critical interface for interacting with systems in India, given its linguistic diversity, Asbe acknowledges that it’s still early days for widespread adoption. NPCI itself launched a voice assistant-based interactive system in 2023. However, the true potential of voice models hinges on greater accuracy and the development of compelling use cases that resonate with users. With the right applications, voice could indeed become an indispensable component in simplifying and democratizing the payment ecosystem.
AI in Finance and Regulations: A Balanced Approach
The global financial sector is in an exhilarating race to integrate AI, with companies like Coinbase and Robinhood in the U.S. exploring agentic trading on users’ behalf, and OpenAI allowing personal account data uploads to ChatGPT for financial advice. NPCI has also showcased promising demos around agentic commerce and payments with Razorpay last year, hinting at future possibilities within the Indian context. Yet, a broader rollout of these advanced capabilities remains cautious, reflecting a deliberate approach to innovation.
Asbe firmly believes that India can embrace AI-powered finance, but only with robust regulations and a comprehensive framework firmly in place. The paramount concern, he emphasized, is ensuring sufficient protection for users and effective mitigation of risks. In scenarios where unforeseen issues arise, the system must be equipped to meticulously review the instructions and consent provided by the user to an AI agent, establishing a clear audit trail and accountability. This emphasis on governance is critical to fostering trust in an increasingly AI-driven financial landscape.
Beyond merely adopting existing models, Asbe sees a unique opportunity for the Indian finance ecosystem to innovate by building specialized small language models (SLMs). “We believe that the models will differentiate from each other based on the data sets that are made available to them,” he asserted. India’s vast and diverse digital footprint provides an unparalleled “rich data set” that can be leveraged to create SLMs that are “sharp, specific, and as deterministic as possible.” This localized approach would allow Indian banks, FinTechs, and the broader ecosystem to develop highly tailored AI solutions that are deeply relevant to the nation’s unique financial behaviors and linguistic nuances, potentially setting a new standard for precision and reliability in financial AI.
NPCI has already demonstrated its commitment to AI-driven solutions with the launch of FIMI last year, a model designed to efficiently resolve user disputes. Asbe proudly noted that FIMI is already serving over a million users, assisting in tasks such as cancelling mandates and resolving various issues, and is rapidly scaling its operations. This internal innovation underscores NPCI’s practical application of AI to enhance user experience and operational efficiency.
UPI Competition: Balancing Growth with Market Diversity
While UPI’s success is undeniable, NPCI has long advocated for healthy competition among its participating apps. However, current data indicates a significant concentration of market share, with Walmart-owned PhonePe and Google Pay collectively dominating over 80% of transactions. This concentration presents a challenge to NPCI’s vision of a diversified and competitive ecosystem.
In response, the regulator’s plan to cap any single app’s market share at 30% is slated to come into effect on December 31, 2026. This deadline, however, has been subject to previous deferrals, raising questions about its ultimate implementation and impact. During our conversation, Asbe acknowledged the complexities of this issue, noting that UPI apps generally feature very low switching costs for users, and most core functionalities are shared across platforms.
He attributed the current market dominance to the substantial investments poured into these apps by their parent companies, allowing them to acquire and retain users at scale. Asbe believes that a more level playing field will emerge when new players can identify and capitalize on “viable business models within the fintech ecosystem.” The moment such commercial models become widely available and attractive, he predicts, “newer players will start investing very heavily,” thereby fostering greater competition and innovation.
In a strategic move to foster a sovereign and secure alternative, NPCI spun off its own BHIM UPI app in 2024, aiming to make it more competitive and boost its usage. While BHIM’s transaction volume has seen growth, its overall market share remains around 1%. Asbe clarified that NPCI isn’t eyeing a specific market share target for BHIM. Instead, its primary objective is to ensure the availability of a robust, government-backed option that can serve as a reliable benchmark and alternative to privately-owned applications, upholding the principles of digital sovereignty and security.
India’s stature as one of the world’s largest and most dynamic digital economies continues to attract global investor attention. The evolving regulatory landscape, particularly around AI integration and market competition, will be a crucial factor for those looking to invest in new fintech solutions and contribute to making the Indian market even more competitive and innovative.
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