India Aims to Onboard 300 Million More Users to UPI
India is planning to bring in another 200 to 300 million users on its revolutionary Unified Payments Interface (UPI), aiming to decrease further the use of cash and take more citizens on board under the umbrella of digital finance. The effort, being spearheaded by the National Payments Corporation of India (NPCI), entails targeted efforts to get underserved populations, including children and domestic help, who do not have access to regular banking services.
NPCI Managing Director and CEO Dilip Asbe said the company is formulating a plan to 'break the cash memory' of millions by providing delegated accounts and adding multilingual and chat-based capabilities to bring UPI to the masses. "The concept is to enable payments to become seamless for all, irrespective of their digital or financial literacy levels", he added.
In the last five years, UPI has revolutionized India's retail payments scene, allowing over 450 million users to pay for anything ranging from small routine transactions to large-ticket transactions using their mobile phones. With just a quick QR code scan, users can instantly make payments directly from their bank accounts, with the transaction limit up to Rs 500,000 ($5,817) and all of this largely free of cost.
India presently handles almost 46% of global digital payments, having registered a 90-fold increase in digital retail payment volumes in the last 12 years, per a PwC report. This achievement isn't just being leveraged towards greater domestic integration but is also driving the ambition of the government to go international with UPI.
"The vision is to make remittances extremely cheap and real-time to all the diaspora", Asbe said, adding that India's diplomatic missions and the Reserve Bank of India (RBI) are encouraging UPI strongly to foreign governments. India attracted a record $129 billion in remittances in 2024, its highest ever incoming remittance-incoming country in history, according to World Bank data.
NPCI’s global aspirations have already seen UPI partnerships with countries like Singapore and the United Arab Emirates. However, progress with Western nations such as the United States, United Kingdom, and Australia has been slower, due to differences in the maturity of real-time payment infrastructure.
Locally, NPCI is also testing vision recognition technology to enable UPI payments at parking lots and public places, so that convenience and ease of use can be enhanced in day-to-day situations. The platform is also looking at opportunities in credit offerings. While small-ticket loans are already possible through UPI, Asbe opines that the architecture could be transformed into a 'credit-as-a-service' model where credit ratings are a function of real-time repayment data, which may enhance disbursement as well as recovery.
"Credit-as-a-service is going to shift and get some scale over the next three to five years", Asbe predicted.
In spite of the exponential growth in adoption, UPI has a significant hurdle in its monetization strategy. The government has since waived the Merchant Discount Rate (MDR) a merchant-paid transaction fee since 2020 to incentivize use. While the step hastened adoption, it has caused banks and service providers to contend with sustainability issues.
Government subsidies aimed at making up for the loss in merchant charges plummeted from Rs 36 billion in 2024 to only Rs 15 billion in 2025. Industry associations have since approached the government requesting that it bring back MDR, if not for everyone, then for bigger businesses.
But sentiment of the public seems strongly against any such move. The recent LocalCircles poll of 32,000 users said 73% would definitely discontinue using UPI if a transaction charge was imposed.
Recognizing this, Asbe said that the NPCI is in collaboration with the government and RBI to develop a balanced model. "We are attempting to make UPI feasible by making a small charge for the big merchants, so that most of the users can keep using it for free", he said.
While India readies to take UPI to its next milestone domestically as well as internationally the spotlight is on inclusivity, innovation, and long-term sustainability of the platform.
