Chat App-Based Payments, Seamless Biometrics to Drive Next Phase of UPI Adoption: Report

The next phase of growth in India's Unified Payments Interface (UPI) will come from frictionless biometric authentication and conversational "chat and pay" journeys, according to a report by Worldline, a global payment service provider.

The report highlighted that UPI's next wave of expansion is already visible, with global corridors such as Singapore and the UAE extending UPI's reach beyond India. Chat-based conversational payment journeys and UPI Autopay are making transactions more seamless within apps, while biometric authentication pilots are expected to redefine user experience and expand adoption across diverse demographics.

It stated, "The next chapter will bring major advances: frictionless biometric authentication and conversational 'chat and pay' journeys, and the adoption of embedded finance use cases that bring recurring payments and global corridors to mainstream audiences."

According to the report, these developments will help bring recurring payments and cross-border transactions into the mainstream.

India's UPI ecosystem is driven by two primary flows — peer-to-peer (P2P) transfers and peer-to-merchant (P2M) payments. During the first half (1H) of 2025, P2P transactions grew by 31 per cent to 39.35 billion, while P2M transactions surged by 37 per cent to 67.01 billion.

This shift toward merchant payments reflects how sectors such as groceries, pharmacies, food and beverages, and utilities have normalised QR-based payments. Although this has led to smaller average transaction sizes, it has significantly expanded UPI's overall reach.

The report also pointed out that the next set of growth drivers will include credit on UPI and small-ticket EMIs.

The Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) are steering innovation toward these segments to encourage higher-value transactions within the P2M stream while maintaining high transaction volumes.

"India's strength lies in frequency, not size, every micro-payment fuels a macro shift," the report noted, emphasising how recurring small payments are driving large-scale adoption.

Furthermore, the ecosystem continues to evolve as cards redefine themselves for premium use, and platforms such as FASTag and Bharat Connect create invisible payment rails for everyday life.

The report concluded that the first half of 2025 marked a significant milestone for India's digital payments ecosystem, reinforcing the country's position as a global leader in scale, innovation, and financial inclusion.

With changing consumer habits, rising merchant acceptance, and proactive regulatory support, India's digital payment landscape is becoming more versatile, secure, and inclusive than ever before.

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