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One of the biggest concerns for UPI users has been digital payment fraud and scamsters constantly finding new ways to syphon off money. To address this, the National Payments Corporation of India (NPCI) is planning to make artificial intelligence (AI) a key part of UPI’s next phase, using the technology to detect suspicious transactions faster, identify mule accounts and strengthen fraud prevention.

At Mumbai Tech Week (MTW) 2026, NPCI Managing Director and CEO Dilip spoke to TechCrunch. Asbe said AI will help make UPI safer and support its next phase of growth by simplifying user onboarding, improving access to credit and helping the platform move beyond 750 million daily transactions towards the one-billion mark.

AI To Drive Next Phase Of UPI Growth

Asbe believes AI can make digital payments more accessible, particularly for first-time users. “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 said voice-based and multilingual AI tools could simplify the onboarding process, making UPI easier to use for people who may not be comfortable with English or smartphone interfaces. “We must use AI to look at the voice and multilingual solutions to make onboarding simpler.”

NPCI did launch an interactive system based on a voice assistant in 2023, although Asbe admitted the uptake has been low so far. He expects AI models and voice technology to advance in the coming years to make such solutions more viable.

Can AI Help Prevent UPI Fraud?

Fraud prevention is another area where NPCI sees significant potential for AI.

According to officials familiar with the project, NPCI has already begun piloting an AI-powered fraud detection system with nearly a dozen banks. The initiative involves banks running an AI model developed by NPCI on their transaction data to generate risk scores, as per reports.

These signals are then shared with NPCI, which can analyse payment flows across the banking network in real time. If money appears to be moving rapidly through multiple accounts — a common pattern in digital fraud involving mule accounts — the system can trigger alerts or even enable banks to freeze transactions before the funds disappear.

Asbe also highlighted fraud prevention as one of AI’s biggest use cases for UPI. “We must use AI effectively to protect our current citizens, to find fraud, and to find mules.”

If the pilot proves successful, it could strengthen India’s ability to intercept fraudulent transactions before stolen money is dispersed across multiple accounts.

AI Could Also Help Banks Offer Credit Faster

Beyond payments and fraud detection, NPCI sees AI playing a larger role in lending.

Asbe said AI systems could eventually help financial institutions extend credit to users and merchants with established digital payment histories by analysing their digital footprints.

He did not put a timeline on it, but the approach could speed up loan approvals, making them more data-driven, especially for borrowers with thin credit files.

NPCI Wants India To Build Small AI Models

Asbe also argued that India’s banking and fintech ecosystem is well placed to develop specialised AI models tailored to financial services, rather than relying solely on large general-purpose 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.”

He added that focused AI models built on India’s payments data could solve practical financial problems more effectively while remaining predictable for regulated use cases.

FIMI Already Handles Over A Million Users

NPCI is already using AI through FIMI (Finance Model for India), its domain-specific AI platform introduced last year.

According to Asbe, the platform currently supports more than one million users, helping with UPI- customer service requests, including mandate cancellations and dispute resolution. He expects usage to rise significantly as more services are added.

Competition In The UPI Market Still Remains Uneven

UPI continues to be dominated by PhonePe and Google Pay, which together account for more than 80% of transactions.

NPCI plans to implement a 30% market share cap for individual UPI apps by the end of 2026, although similar deadlines have been deferred in the past.

Asbe told TechCrunch that established players have invested heavily over the years and that meaningful competition will emerge only when newer UPI apps discover sustainable business models.

He also said NPCI is not chasing market share for its own BHIM UPI app, which currently holds around 1% of the market. Instead, its objective is to provide a secure, sovereign alternative within India’s digital payments ecosystem.

What It Means for UPI Users

NPCI’s AI roadmap suggests that the next phase of UPI will focus on much more than processing higher transaction volumes. If the plans materialise, users could see easier onboarding through voice and regional-language interfaces, stronger protection against digital payment fraud and faster access to credit based on their digital payment history.

With UPI already processing hundreds of millions of transactions every day, AI is expected to become one of the key technologies supporting the platform’s next stage of growth while making the ecosystem more secure and inclusive.

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