India has taken another major step in the development of its digital financial infrastructure, launching a tap-and-pay function for the Unified Payments Interface that allows consumers to make UPI payments simply by holding an NFC-enabled smartphone against a compatible payment terminal.
The new UPI Tap & Pay capability was unveiled at the Global Fintech Fest in Mumbai, extending India’s real-time payment network deeper into physical retail.
Until now, UPI has been strongly associated with QR codes, which have become ubiquitous across India, from large retailers to small street merchants.
The new system adds another option: the familiar contactless experience traditionally associated with bank cards and mobile wallets.
From QR codes to contactless payments
With UPI Tap & Pay, users unlock an NFC-enabled smartphone and tap it against a compatible point-of-sale terminal.
Payments of up to ₹5,000 can be completed without entering a UPI PIN, reducing friction for smaller everyday transactions.
The development is particularly significant because of the extraordinary scale UPI has already achieved.
In August, the system processed more than 24.5 billion transactions through 752 participating banks.
AI enters the payment system
India is simultaneously adding artificial intelligence to the UPI ecosystem.
MyUPI, another new service, uses an India-focused small language model to provide multilingual assistance, transaction information, fraud-related controls and support with payment disputes.
The combination demonstrates how India is increasingly treating payments not as a standalone financial product but as infrastructure upon which additional services can be built.
India looks beyond its borders
The development comes as India is also attempting to expand UPI internationally.
Prime Minister Narendra Modi has called for the system to connect with payment networks in more countries, while UPI already supports international merchant payments in selected markets.
For fintech companies, the significance extends beyond another method of paying at a shop.
India is building a financial ecosystem combining instant bank transfers, QR payments, contactless transactions, digital identity, artificial intelligence and increasingly international connectivity.
UPI began as a way to move money instantly between bank accounts.
Ten years later, it is evolving into something considerably larger: a national financial infrastructure that India increasingly wants to export to the world.
Newshub Editorial in Asia – 14 September 2026
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