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UPI 3.0 to let your smart devices handle payments
17 Aug 2025

The National Payments Corporation of India (NPCI) is working on a revolutionary upgrade to its Unified Payments Interface (UPI) system.

The upgrade, dubbed UPI 3.0, will be IoT (Internet of Things)-enabled and allow automated payments through all smart devices.

This means you won't have to rely solely on your smartphone for UPI transactions anymore.

The new system would work on the capabilities of existing features like UPI Autopay and UPI Circle.

IoT-enabled UPI transactions
Working mechanism

The IoT is a widely used connection and data exchange technology, enabling communication and interaction between devices with software or sensors connected to the internet.

This means that UPI payments can be made without human intervention, through smart devices like TVs, fridges, washing machines, cars, and smartwatches.

The system would allow users to automate payments for services such as monthly subscriptions directly from their smart devices.

Announcement expected in October
Future plans

The official announcement for this system upgrade is expected at the Global Fintech Fest of 2025, pending regulatory approvals.The event is scheduled to be held in Mumbai in October.

According to NPCI sources, users will be able to issue a mandate to a smart device from their main UPI device.

This would create a secondary UPI ID linked to the user's main account, allowing automated transactions within certain limits yet to be announced.

Addressing concerns about transactions and privacy
User experience

The new UPI upgrade is expected to improve user experience by allowing automated transactions through smart devices.

This would be similar to giving a payment command to a human, but with the added advantage of separate IDs for different devices.

The NPCI is also working on regulatory compliance and data security measures for this new system, addressing concerns about unauthorized transactions and privacy requirements.

UPI processed over 185 billion transactions in FY25
Market analysis

In FY 2024-25, UPI processed a whopping 185.8 billion transactions, a massive 41.7% increase from the previous year.

According to a Reserve Bank of India (RBI) report, last year, 83% of India's retail payments were made through UPI.

The global market size for autonomous payments is projected to grow at a CAGR of over 40% between 2024 and 2032, according to Global Market Insights.