Conversational Payments Via AI Being Developed To Bolster India’s Digital Ecosystem: FM

Finance minister Nirmala Sitharaman has said conversational payments through artificial intelligence and offline functionality are being developed as a part of India’s evolving digital financial ecosystem.

Speaking at the Digital Payments Award 2025, Sitharaman said that India now accounts for half of all real-time digital payments (48.5%) in the world and over 35 Cr users are part of the Unified Payment Interface (UPI) ecosystem.

“This is a direct outcome of citizen enthusiasm, participation from urban and rural populations for this openness to change and for making the effort to learn and adopt new technology,” she added.

Conversational payments refers to a new payment mode, facilitating users to interact with an AI-based system through natural language conversation and initiate transactions. On the other hand, offline functionality allows users to complete digital transactions and manage UPI services in areas with less or no connectivity.

While this is a major step in digital inclusion, Sitharaman also urged fintech startups to tap rural India for new market opportunities. 

“Every fintech firm should view rural India as a fertile ground and not just as a social responsibility but as an opportunity to create new markets,” she added.

Talking further about financial inclusion, the minister suggested that fintech companies should bring regional languages and voice-based services.

UPI Leading The World’s Digital Payment Landscape

Indian’s fintech revolution is not just within the country, but continues to impact other markets and attract a global audience.

In her speech, Sitharaman further said that the country is not just renovating itself, but also helping other countries to expand their digital payment landscape.

“UPI is now accepted at select merchant outlets in seven countries including Bhutan, France Mauritius Nepal Singapore Sri Lanka and the UAE,” she added.

India’s fintech market, which is projected to grow to more than $400 Bn by 2028-29, achieved 80% financial inclusion rate in 6 years.

As per Sitharaman, some reports suggest that this level of financial inclusion would normally take five decades.

Talking on the ecosystem front, she revealed that more than 700 entities operating across the BFSI (banking, financial services and insurance) sector joined the account aggregator platform in the past three years, jumping from 24 entities in 2022.

The National Payments Corporation of India (NPCI) recently rolled out  new mandates to reduce the response time for processing UPI payments. 

The new rules direct remitter banks, beneficiary banks as well as payer and payee payment service providers (PSPs) to reduce response time for UPI APIs initiated by the NPCI to as low as 10 seconds for certain transactions. 

Last month, UPI transaction count grew 4.4% to 18.68 Bn from 17.89 Bn in April, touching a fresh all-time high.