India UPI AI growth is the central bet Dilip Asbe is placing on the next phase of the country’s digital payments story, with the head of the National Payments Corporation of India (NPCI) arguing that artificial intelligence will be the mechanism that carries the Unified Payments Interface from 750 million daily transactions to beyond one billion.
Asbe, who serves as NPCI’s managing director and chief executive, made the case during an interview at Mumbai Tech Week 2026. He identified three areas where AI would carry the most weight: reaching new users, detecting fraud and money mules, and extending credit to merchants and consumers who have accumulated digital transaction histories but lack formal credit records.
‘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. He added: ‘We must use AI to look at the voice and multilingual solutions to make onboarding simpler.’
Voice, Language Models, and the India UPI AI Growth Opportunity
Voice as an interface has attracted considerable interest across India’s technology sector, though Asbe is measured about its readiness. NPCI launched a voice assistant-based interactive system in 2023, and adoption has been slow. Asbe’s view is that accuracy in voice models needs to improve before the technology becomes a meaningful onboarding channel, but that the right use case could make it a critical component of the payments ecosystem.
His more immediate enthusiasm is for small language models built on financial data. ‘We believe that the models will differentiate from each other based on the data sets that are made available to them,’ he said. ‘We have a very rich data set in our ecosystem. I think there is a big opportunity for Indian companies (the banks, FinTechs, and the ecosystem) to create small language models which are sharp, specific, and as deterministic as possible.’
NPCI has already moved in this direction. The organisation launched a model called FIMI to handle user disputes, and Asbe says it is now serving over a million users to cancel mandates and resolve issues, with usage scaling quickly.
On agentic commerce, where AI agents carry out financial transactions on behalf of users, Asbe’s position is that India can adopt these capabilities provided the regulatory framework is built first. He argued that user consent and instructions given to an agent need to be fully auditable, so that if something goes wrong, the system can trace exactly what authority the agent was given. NPCI has shown demos of agentic payments alongside Razorpay, though a broader rollout has not followed.
Market Concentration and the Approaching Cap Deadline
The competitive structure of UPI remains the policy question that shadows all of this. As of November 2024, PhonePe held a 47.8% share of UPI payments and Google Pay accounted for 37%, according to regulatory data cited by Electronic Payments International. Together, the two platforms command well over 80% of the market.
NPCI first proposed a 30% market share cap for any single UPI app in November 2020. The December 31, 2026 deadline is the second time the organisation has extended the timeline, with the first extension also adding two years, according to Business Standard. Alongside that extension, NPCI lifted the phased user-onboarding cap that had restricted WhatsApp Pay, allowing the Meta-owned platform to offer UPI services to its entire user base in India, as reported by The Startup Spectrum.
Asbe’s diagnosis of concentration risk is structural rather than regulatory. He told the Mumbai Tech Week audience that PhonePe and Google have each poured significant capital into their apps to reach their current positions, and that newer entrants will only invest heavily when a viable commercial model exists within the UPI ecosystem. ‘The moment we see the commercial model being available to the ecosystem, I believe newer players will start investing very heavily,’ he said.
NPCI spun off its own BHIM UPI app in 2024 to make it more competitive. Transaction volumes have grown since, but its overall market share sits at around 1%. Asbe said NPCI is not targeting a specific share for BHIM. The goal is to position it as a sovereign and secure alternative, rather than to win a commercial race.
The cap’s December 2026 deadline arrives against that backdrop: two dominant platforms with entrenched positions, a third player with regulatory backing but thin market share, and a WhatsApp Pay now free to scale. Whether the cap actually forces a redistribution, or gets deferred a third time, is the question that will shape the competitive landscape well into the next decade.
