India is harnessing the power of artificial intelligence (AI) to extend digital payments into rural areas.
As reported by the Financial Times (FT) on Saturday (August 19, 2023), India’s Universal Payments Interface (UPI), now adopted by around 350 million users, has encountered challenges in penetrating the country’s rural regions due to limited internet access and lower literacy rates.
To address this, the Reserve Bank of India has introduced a new initiative for “conversational” payments. This feature enables UPI users to verbally communicate transfer instructions via their mobile phones, with the transactions processed through AI-based speech recognition technology.
The service is set to utilize open-source AI language tools developed by the Indian Institute of Technology Madras. It will initially be available in English and Hindi before expanding to encompass other languages.
The central bank has indicated that individuals lacking internet access can still conduct transactions through near-field communication technology, enabling “retail digital payments in situations where internet or telecom connectivity is weak or unavailable.”
Research reveals that 48% of Indian consumers made their latest retail purchase using UPI. The system is especially favored for digital retail transactions, with 55% of Indian consumers employing UPI for their most recent digital retail purchase, in comparison to 37% for in-store retail purchases.
This strong UPI adoption is partly attributed to India’s prior familiarity with mobile-based bill payments, banking, and merchant transactions, which were already widespread before UPI’s launch in 2016.
“India’s millennial, bridge millennial, and Generation Z shoppers have been the country’s early adopters of these digital-first shopping experiences,” Recent report highlights India’s progressive approach to digital shopping practices.
Furthermore, India accounts for 46% of the world’s real-time payments and conducts more digital transactions than any other country globally.