NPCI chief says AI to play big role in next wave of UPI

NPCI CEO Dilip Asbe has hinted that we may soon see AI being used within UPI as the organisation plans to expand its user base. Asbe believes that banks should develop their own AI models for certain tasks.

In Short

• NPCI CEO Dilip Asbe says AI to play big part in next wave of UPI
• Dilip Asbe hints AI to help bring new users
• He wants banks to build their own AI models

AI tools have become widely used across various sectors, be it coding or automation of tasks. Now, it appears that the National Payments Corporation of India (NPCI) wants to use AI tools for the next big wave of UPI, as the digital payment service continues to grow in the country.

NPCI CEO Dilip Asbe has pointed out that the organisation has some big plans to use AI for the growth of UPI, particularly when it comes to bringing new users onboard. Asbe told TechCrunch, “AI will be used very effectively when we look at the next wave of UPI, and that includes all aspects, including reaching new users.”

He also pointed out that voice assistants may make it easier for users to join UPI platforms. Dilip Asbe added, “We must use AI to look at the voice and multilingual solutions to make onboarding simpler.”

NPCI launched a voice assistant-based interactive system in 2023. Though Asbe accepted that adoption for that yet to take off.

UPI, or unified payments interface, was launched in India in April 2016. Since then, it has become one of the most important digital payments systems in India. UPI now handles more than 750 million transactions a day, and NPCI is aiming to take that beyond one billion daily transactions.

AI may give approve your loan

The NPCI chief also reckoned that automated systems with AI can potentially be used to “provide credit” to users and merchants with “digital footprints.” That is, an AI system may be able to sanction a loan for you.

A key concern for online transactions is the potential for fraud. Asbe insisted that NPCI was planning to use AI tools to create better safeguards for online transactions. He added, “We must use AI effectively to protect our current citizens, to find fraud, and to find mules.”

Banks should create AI models, says NPCI CEO

When it comes to AI models as a whole, Dilip Asbe believes that the Indian financial ecosystem has an opportunity to build small language models. “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.”

Dilip Asbe’s comments come at a time when the RBI has issued draft guidelines that would mandate a kill switch-like mechanism for all AI tools being used by banks and financial institutions in the country.

Asbe added that NPCI’s dispute-resolution model, FIMI, launched last year, is already serving more than a million users for mandate cancellations.

UPI remains consolidated by two big players – PhonePe and Google Pay that enjoy a combined share of over 80 per cent. However, NPCI is set to bring a cap by the end of this year that would limit an app’s market share to 30 per cent. NPCI’s BHIM UPI app has around 1 per cent market share.

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