India is using artificial intelligence (AI) to expand digital payments to rural areas.

As the Financial Times (FT) noted in a report Saturday (Aug. 19), while India’s Universal Payments Interface (UPI) is now used by around 350 million, it has had trouble breaking into the country’s more rural regions due to spotty internet access and lower levels of literacy.

It’s why the Reserve Bank of India has recently unveiled a plan for “conversational” payments, allowing UPI users to make verbal transfer instructions on their phones which will be processed using AI-based speech recognition.

According to the report, the service will use open-source AI language tools developed by the Indian Institute of Technology Madras, and will at first be available in English and Hindi before expanding to include other languages.

The central bank says users without internet access will be able to make transactions using near field communication technology, allowing for “retail digital payments in situations where internet [or] telecom connectivity is weak or not available.”

The launch is happening when UPI is dominating the retail sector in India, with close to half of all retail transactions happening over the platform, according to PYMNTS’ research.

That research shows that 48% of consumers in India made their last retail purchase using UPI. The system is more popular for digital retail purchases: 55% of India’s consumers paid for their most recent digital retail purchase through UPI, versus 37% for in-store retail purchases.

It helps that people in India were already used to using their mobile phones to make bill, bank and merchant payments by the time UPI was rolled out in 2016. Research by PYMNTS shows that consumers in India used digital wallets to pay for 55% of retail purchases.

“As one might expect, given India’s trailblazing nature, local consumers use more digital shopping features than their counterparts in the United States or the United Kingdom,” PYMNTS wrote last week. “India’s millennial, bridge millennial and Generation Z shoppers have been the country’s early adopters of these digital-first shopping experiences.”

The country also accounts for 46% of the world’s real-time payments, and carries out more digital transactions than any other place on Earth.

And as noted here last week, this has made India a fertile battleground in the ongoing rivalry between retail giants Walmart and Amazon.



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