AI to Revolutionize Digital Payments: India's Experience

Dilip Asbe, head of the National Payments Corporation of India (NPCI), stated that AI technologies will play a decisive role in the next stage of development for the digital payments system. Currently, over 750 million transactions are carried out daily via the Unified Payment Interface (UPI) system, but the goal is to exceed one billion. In an interview with TechCrunch, Asbe emphasized that AI will not only increase the number of users but also fundamentally transform security and lending systems. This is reported by Techcrunch.com news provides.

According to the expert, AI will become a crucial tool for attracting new users, especially through multilingual interfaces and voice assistants. In a multilingual country like India, making payments via voice commands allows those with low digital literacy to access financial services. This aligns with the government and central bank's plan to onboard half a billion new users.

Security and Anti-Fraud

One of the most important directions for AI technologies is security. The NPCI head noted that AI algorithms are effective in detecting suspicious transactions in real time and blocking "mule" accounts used for money laundering. This system protects citizens' funds while strengthening trust in the digital economy.

Additionally, the lending process for users and entrepreneurs with a digital footprint will be simplified using AI. Small business representatives who lack traditional bank documentation will be able to obtain financial assistance based on their digital payment history. This will serve to increase economic activity.

Voice Technologies and Small Language Models

Although voice models have not yet reached perfection, NPCI is actively working in this direction. The voice interactive system launched in 2023 has not yet become widespread, but with the right approach, it is expected to become an integral part of the payment ecosystem. While companies like OpenAI and Coinbase in the US are using AI for financial advice and agentic commerce, India is also creating its own regulatory framework.

According to Dilip Asbe, there is an opportunity to create specialized "Small Language Models" for India's finance sector. Unlike large models, these models are based on specific datasets and have a minimal error rate. For example, the FIMI model launched last year is already helping over one million users resolve payment disputes.

At the same time, the issue of competition in the digital payments market remains relevant in India. Currently, PhonePe and Google Pay control over 80 percent of the market. The regulator plans to limit the share of a single app to 30 percent, a rule expected to take effect by the end of 2026. This could open the way for new FinTech startups and AI-based solutions.