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India to add AI-powered conversational payments to UPI

India to add AI-powered conversational payments to UPI

The Reserve Bank of India has set out plans for a host of new fintech developments, including AI-powered "conversational" payments on the country's UPI system and a public digital platform for the provision of frictionless credit.

As it looks to add new features to the UPI (Unified Payments Interface), the central bank has identified AI's potential to enable conversational payments, letting users engage in a conversation with an AI-powered system to initiate and complete transactions.

The offering will be made available in both smartphone and feature phone-based UPI channels, initially in Hindi and English.

In an effort to broaden financial inclusion, the RBI is also working on offline payments in UPI.

To increase the speed of small value transactions on UPI, an on-device wallet called UPI-Lite was launched last year. The product has gained traction and currently processes more than ten million transactions a month. To promote the use of UPI-Lite, the Bank plans to facilitate offline transaction using NFC technology.

Meanwhile, as it encourages fintechs and startups to offer credit products, the RBI is working to address the fact that the data required for credit appraisal are available with different entities in separate systems, hindering frictionless and timely delivery.

Last year, it began a pilot for digitalisation of Kisan Credit Card loans, testing end-to-end digitalisation of the lending process in a paperless and hassle-free manner. The pilot is currently underway and the initial results are "encouraging".

Now, a digital platform is being developed to facilitate the seamless flow of required digital information to lenders. The end-to-end digital platform will have an open architecture, open APIs and standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model.

Comments: (3)

Hitesh Thakkar
Hitesh Thakkar - SME - Fintech startups (APAC and Africa) - India 11 August, 2023, 17:041 like 1 like

RBI's initiative to issue Account aggregation license will help building uses cases around Insurance and lending and many more.

There is increase in offline UPI transaction limits from INR 200 to INR 500.

David Gyori
David Gyori - BANKING REPORTS, LONDON - London 13 August, 2023, 12:161 like 1 like

This is VERY IMPORTANT and GREAT. What India is doing through UPI is absolutely global best practice! Well done! 

Mukta Agarwal
Mukta Agarwal - hcl america - San Francisco 16 August, 2023, 02:051 like 1 like

Great step for financial inclusion as lot of consumers find it difficult to use UI interfaces