The growth of the Universal Payments Interface, a digital payments system, is an important part of Prime Minister Narendra Modi’s ambitions to build India’s digital infrastructure and bring the world’s most populous country online. Since UPI was launched in 2016, digital transactions have taken off: about 350mn people now use UPI to pay for goods and services or to transfer money instantly. The system recorded almost 10 billion transactions in July, more than 50 per cent higher than the same month last year. But its penetration into India’s poorer rural areas has been hampered by sparse internet access and lower levels of literacy outside urban areas.
To address this gap, the Reserve Bank of India announced a plan for “conversational” payments. UPI users will be able to make verbal transfer instructions on their phones which will be processed using AI-based speech recognition to initiate transactions.
The service, which will use open source AI language tools developed by the Indian Institute of Technology Madras, will initially be available in English and Hindi before being broadened to other languages.
Users will also be able to make transactions without the internet by using “near field communication” technology, a system widespread in contactless card transactions, that uses a connection between two close-by phones. This will “enable retail digital payments in situations where internet [or] telecom connectivity is weak or not available”, the RBI said.
Dilip Asbe, head of the National Payments Corporation of India said the measures would facilitate digital payments outside India’s largest cities.
Modi’s government has promoted cashless payments as part of a digital infrastructure suite, known as the India Stack, designed to bring the country’s vast and unregulated cash based economy into the formal financial system.
The UPI system has also been central to Modi’s pitch to attract foreign investment, with companies including Google and Walmart-owned PhonePe building popular payment apps. Countries such as Singapore and the United Arab Emirates have also integrated elements of India’s payments infrastructure with their own.