AI to IoT: How 4 new technology features will make UPI transactions easier
New Delhi, Oct 10, 2025
Central bank announces plan to improve steps to improve popular digital payments platform
The Reserve Bank of India will use four technologies to make Unified Payments Interface (UPI) transactions faster, safer and more inclusive, it said this week in Mumbai.
The use of Internet of Things (IoT), artificial intelligence (AI) and other technologies will also help India’s digital economy, experts said. Here is more about the technologies.
PIN comfort
A central theme of technology reforms is reducing the need for repeated PIN entries while strengthening security. Biometric and device-based authentication will increasingly replace traditional PIN-based authorisations, offering smoother transaction flows.
“Replacing PIN with face or fingerprint authentication will make transactions seamless and secure, especially for new-to-credit users who are often most vulnerable to phishing and fraud,” said Siddharth Mehta, cofounder of Kiwi, a UPI-based credit card.
Four key innovations
IoT for UPI: The technology will enable payments through connected devices, such as smartwatches, smart glasses or even a car, besides smartphones. It will improve convenience, but Reeju Data, cofounder of Cashfree Payments, a payment gateway, said “device-hacking risks mean user awareness and secure device linking are essential.”
Banking Connect: It’s a unified net banking platform that enables payments directly from bank apps without multiple logins. Banking Connect could streamline online shopping and bill payments. “It will make transactions faster, safer, and more human-centric,” said Anil Sinha, chief technology officer of Fibe, a lending platfom.
UPI Reserve Pay: Users can earmark credit for future payments, simplifying recurring spends. It makes payments convenient but will require careful limit management to avoid overspending.
AI-Based UPI Help: An in-app AI assistant for instant query resolution, mandate management and dispute handling. The technology promises quick customer support, but will need safeguards against erroneous advice and privacy breaches.
Convenience vs. caution
These upgrades could significantly cut payment friction and broaden UPI’s reach, especially for rural and underserved users. Yet experts stress strong security measures and user education will be vital to avoid cyber threats.
“These advancements align with India’s vision for a secure, inclusive, and future-ready digital economy,” said Mehta.
[The Business Standard]
