The Reserve Bank of India is soon to propose ‘conversational payments’ on UPI using artificial intelligence (AI). So, what is a conversational payment? Conversational Payments on UPI will allow users to make voice-enabled UPI payments via UPI apps, telecom calls, and Internet of Things (IoT) devices, as mentioned by the National Payments Corporation of India (NPCI). To simplify, conversational payments are online transactions that happen in real-time during a chat. They involve two main players: the chat operator and a payment provider.
While presenting the central bank's monetary policy committee decision to maintain the repo rate, Reserve Bank of India (RBI) Governor Shaktikanta Das mentioned the RBI's proposal to leverage artificial intelligence (AI) for conversational payments on the unified payments interface (UPI). Governor Das mentioned that these transactions, from start to finish, will be in a completely secure environment.
This will be a complete turning point for the 300 million active UPI users in India. UPI, as you know, is an instant payment system that was introduced by the National Payments Corporation of India in 2016 and has now transformed the ecosystem of digital payment in India.
Initially, the conversational payments system will be made available in English and Hindi, with more languages to be added in the future in both smartphone- and feature phone-based UPI channels. It may support both C2C and C2B transactions and is expected to increase the adoption of financial services in India. It aims to increase the transaction cap for low-value digital offline payments from INR 200 to INR 500 while maintaining an aggregate cap of INR 2000 per payment instrument. It also does not have two-way factor authentication and is faster, more reliable, and contactless.
The RBI claims that the technology has "immense potential in improving usability and, consequently, reach of the UPI system" and that its investigation of conversational payments is done actively in consideration of artificial intelligence's (AI) growing influence in the market.
The Indian economy has grown steadily, becoming the fifth-largest in the world and contributing about 15% to world economic expansion. India's strong macroeconomic fundamentals have laid the conditions for long-term growth.
With the addition of several functionalities throughout time, UPI is now equipped to accommodate the economy's various payment demands. Conversational instructions have enormous potential to improve the UPI system's usability and, as a result, its reach, since artificial intelligence (AI) is becoming more and more ingrained in the digital economy. Users will be able to communicate with an AI-powered system to start and finish transactions in a safe and secure setting.
Additionally, the innovation and advancements made in India's digital payments sector are expected to improve our reputation internationally, particularly with regard to UPI and digital payments.
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