RBI Issues New Guidelines for Payment Aggregators and Digital Payments

🚀 GFF 2025: Standing at the Edge of a New Financial Era Just back from Global Fintech Fest 2025 in Mumbai - and it truly felt like witnessing the future of finance unfold in real time. The theme, “Empowering Finance for a Better World – Powered by AI,” came alive in every keynote, booth, and conversation. Here are my Top 5 Takeaways 👇 🤖 1️⃣ The Future is Autonomous and Intelligent We’ve entered the era of Agentic AI - where AI doesn’t just predict, it acts. From autonomous banking models and self-optimizing financial advisors to AI-driven fraud detection systems, finance is shifting from automation to autonomy. 💱 2️⃣ Real-Time Forex Settlement - A Game Changer The launch of the Foreign Currency Settlement System (FCSS) at GIFT City is a landmark move, positioning India on the global map for instant cross-border transactions and making GIFT City a true innovation hub. 🔐 3️⃣ Tokenisation is the New UPI Tokenisation is rapidly emerging as the core technology for credit, asset management, and identity - much like how UPI revolutionized digital payments. It’s paving the way for a more secure, interoperable, and programmable financial ecosystem. 🌍 4️⃣ Inclusion at the Heart of Innovation A strong focus this year was on rural finance, digital public infrastructure (DPI), and expanding access for the next 100 million borrowers - proving that innovation and inclusion can (and must) advance together. ⚡ 5️⃣ Innovation in Action - Few Highlights from the Fest 💡 Razorpay → Piloting Agentic Commerce with OpenAI and NPCI for autonomous payments. 💡 Paytm → Transformed the Soundbox into a multilingual AI business assistant. 💡 Easebuzz → Introduced interoperable net banking (IBMB) for smoother transactions. 💡 Navi → Rolled out Biometric UPI & Reserve Pay for secure, real-time settlements. 💡 DigiTathya → Launched secure QR-based product authentication, a strong step for trust tech. 💡 NPCI → Introduced Aadhaar-based Face Authentication to set/reset UPI PIN and On-Device Biometric Authentication as a fast, secure alternative to UPI PINs. ✨ My Reflection GFF 2025 reaffirmed that India isn’t just a fintech hub - it’s becoming the blueprint for global financial innovation. The future we’re building is one where finance is intelligent, inclusive, and deeply human-centric - powered by AI, guided by trust, and driven by purpose. #GFF2025 #Fintech #AIinFinance #Innovation #FinancialInclusion #DigitalTransformation #AgenticAI #Tokenisation #GlobalFintechFest #FutureOfFinance #AI #GFF

How Stax is battling #AgenticAI's incursion into payment processing The company is competing with large payment processors and tech firms like Stripe, PayPal and Block. https://buff.ly/md4ROQQ #FinTech #FinServ #Banking #Payments #PayTech #AI

#FintechFulltoss: A quick look at fintech policy updates from last fortnight ⚖️Regulatory Updates ➡️ Securities and Exchange Board of India (SEBI) has proposed easing geo-tagging rules, letting users such as NRIs complete re-KYC and KYC updates remotely from anywhere. ➡️ Reserve Bank of India (RBI) has expanded its AI-powered Digital Payments Intelligence Platform to 12+ banks for real-time fraud detection. ➡️ RBI launches its fourth hackathon, HaRBInger 2025, seeking solutions on tokenised KYC, offline CBDC, and tech to boost user trust. ➡️ Unique Identification Authority of India (UIDAI) has launched the Scheme for Innovation and Technology Association (SITAA) to partner with academia and industry on innovations in Aadhaar-linked identity technologies. ➡️ Telecom Regulatory Authority of India (TRAI)-led Joint Committee of Regulators pilots mechanisms to manage consent for commercial communications and curb spam. UPI & Digital Payments ➡️ Diwali spending pushes digital payments to record highs, with UPI processing 754 million transactions worth Rs. 1.02 lakh crore in a single day ➡️ RBI’s half-yearly payments report shows that digital volumes across UPI, RTGS and NEFT continue to soar. India’s digital payments have grown 38 times in volume and over three times in value over the past decade. In the first half of 2025, the Unified Payments Interface (UPI) made up 85% of all transactions but only 9% by value. ➡️ Education Ministry urges all states and schools to accept fees through UPI and other digital modes. ➡️ National Payments Corporation Of India (NPCI) has signed an MoU with NTT DATA Japan to enable UPI payments for Indian tourists in Japan. Knowledge Partner: Ikigai Law Startup Policy Forum | Avantika Gode | Shubhangi Poddar

It’s easy to look at UPI (Unified Payments Interface) and just see convenience. we need to see it for what it truly is: a radical disruption of the entire Indian FinTech revenue model. In 2024, UPI hit over 13.4 billion transactions a month. It's a new layer of economic infrastructure that has essentially declared war on the traditional 'transaction fee' model that banks and legacy payment gateways relied on. The Business Analyst’s Take on the UPI Paradox The UPI system, built on the Public Tech Stack, works on a near-zero Merchant Discount Rate (MDR) for most small transactions. This creates a massive paradox for every major player in the Indian finance ecosystem: 1. The Bank’s Forced Pivot: From Fees to Services When core transactions become free, banks can no longer make money on volume. This has forced a strategic pivot that many Western banks still haven’t had to make Old Model: Profit from debit card usage, processing fees, and bank-to-bank transfer fees. (Focus on Motion). New Model: Profit from Value-Added Services leveraging UPI data (Lending, Insurance, Wealth Tech, Credit Card tie-ins). (Focus on Monetization). The banks that survive will be those that have successfully transformed their core BA function from optimizing transaction flow to analyzing UPI usage data for highly targeted credit underwriting. 2. The Tech : The Data Ownership Battle The real value of UPI now lies in the intent data and the customer relationship captured by the TPA (Third-Party Application) layer—PhonePe and Google Pay. As the government pushes for greater RuPay adoption and explores the next wave of ONDC (Open Network for Digital Commerce), the core analytical question for any startup in this space becomes: How do we build a proprietary revenue stream on top of a public, free utility? The next successful Indian FinTech unicorn won't be one that competes with UPI, it will be one that creatively utilizes the free data, speed, and distribution UPI provides. Key Analytical Takeaway for BAs When analyzing any business in India operating on the public tech stack (Aadhaar, UPI, ONDC), don't ask, "What are the transaction costs?" Instead, ask: "Where is the data being generated, and how quickly can we convert that data into a high-margin, sticky service (like credit or insurance) that justifies our valuation?" The payment itself is free; the intelligent monetization of the data around the payment is the business. In the next five years, which of the major players (traditional banks, PhonePe, or the new entrants) do you believe is best positioned to monetize the UPI data stream? #BusinessAnalysis #FinTech #UPI #IndiaTech #Strategy #Banking #DigitalTransformation

🪙 𝐔𝐏𝐈: 𝐓𝐡𝐞 𝐆𝐫𝐞𝐚𝐭𝐞𝐬𝐭 𝐂𝐫𝐞𝐚𝐭𝐢𝐯𝐞 𝐃𝐞𝐬𝐭𝐫𝐮𝐜𝐭𝐢𝐨𝐧 𝐒𝐭𝐨𝐫𝐲 𝐢𝐧 𝐌𝐨𝐝𝐞𝐫𝐧 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 When UPI launched in 2016, most banks saw it as a “nice-to-have” feature. No one imagined it would rewrite India’s financial infrastructure. Fast forward to 2025… it hasn’t just changed payments — it’s redefined the rules of banking. 📊 𝐓𝐡𝐞 𝐍𝐮𝐦𝐛𝐞𝐫𝐬 𝐓𝐞𝐥𝐥 𝐭𝐡𝐞 𝐒𝐭𝐨𝐫𝐲 💸 𝐏𝐫𝐞-𝐔𝐏𝐈 𝐄𝐫𝐚 (𝟐𝟎𝟏𝟓): • Cash made up around 𝟵𝟬% of retail transactions. • Cards processed about 𝟭 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 monthly transactions. • India had 𝟮𝟮𝟬,𝟬𝟬𝟬+ active ATMs. 📲 𝐔𝐏𝐈 𝐄𝐫𝐚 (𝟐𝟎𝟐𝟓): • Over 𝟭𝟮 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 transactions per month. • More than ₹𝟮𝟬 𝗹𝗮𝗸𝗵 𝗰𝗿𝗼𝗿𝗲 (~$240B+) processed monthly. • UPI accounts for around 𝟴𝟬% of India’s retail digital payments. • Debit card usage has flattened. • ATM transactions have dropped 𝟮𝟱%+ from their peak. UPI didn’t come with a bang. It came quietly… and dismantled the old transaction rails that banks depended on. That’s creative destruction in action. 🏅 𝐓𝐡𝐞 𝐍𝐨𝐛𝐞𝐥 𝐀𝐧𝐠𝐥𝐞 The 2025 Nobel Prize in Economics went to Philippe Aghion, Peter Howitt & Joel Mokyr for their work on innovation-driven growth and creative destruction — where new technologies don’t just improve industries… they replace their foundations. UPI is a textbook case: • It bypassed legacy payment infrastructure. • It eroded transaction fee moats. • It rewired customer behavior faster than banks could react. • It opened a new innovation platform for fintech and merchants. ⚡ 𝐀𝐈 𝐈𝐬 𝐍𝐞𝐱𝐭 UPI disrupted payments. AI will disrupt how banks themselves are structured. • Credit underwriting → real-time. • Compliance → embedded intelligence. • Branches → optional. • Trust → algorithmically verified. UPI took less than a decade to kill transaction fees and cash dependence. AI may take even less time to dismantle the old banking model. 🧠 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲 Creative destruction doesn’t ask permission. It starts as “just another feature”… and ends up rewriting the system. 📌 UPI is proof. ⚡ AI is next. 💬 What part of the bank are you willing to let AI destroy — and rebuild? #UPI #AI #Banking #Fintech #Innovation #NobelPrize #CreativeDestruction #DigitalTransformation #FinancialServices #Economics #Strategy #Payments #India #Disruption

RBI's Game-Changing Move: Shifting to Risk-Based Digital Payments Governance 🇮🇳 Huge news for the Indian FinTech space! The RBI has announced a major, forward-thinking shift in its new digital payment guidelines, moving away from rigid, static compliance to a model driven by risk-based checks. This is more than just a regulatory update; it's a strategic empowerment of the ecosystem: The Core Change: Intelligence Over Uniformity The RBI is stepping back from prescriptive, one-size-fits-all transaction limits and check requirements for Payment System Operators (PSOs) and Payment Gateway Providers (PGPs). Instead, it allows operators to: Implement Differentiated Checks: Apply varying levels of scrutiny based on the customer's profile, transaction history, and risk score. Leverage Technology: Encourages the use of advanced AI and machine learning models for real-time risk scoring and monitoring. Why This is a Game-Changer ? Enhanced Customer Experience (CX): Trusted users will face less friction and fewer false declines, leading to seamless checkouts and higher approval rates. Smarter Security: Security teams can dedicate resources to genuinely high-risk activities instead of wasting cycles on low-risk compliance checks, making fraud detection more effective. Fueling FinTech Innovation: This flexibility encourages PSOs and PGPs to aggressively develop and deploy sophisticated, predictive risk management tools. This policy signals a maturing regulatory environment that trusts operators to use technology wisely. We are moving toward an ecosystem where security and speed are optimized simultaneously. What kind of innovative risk models do you expect to see emerge from India's payment players now that they have this flexibility? Share your thoughts below! #FinTech #DigitalPayments #RBI #PaymentsInnovation #RiskManagement #IndiaTech

The Provocative Roadmap for Indian Banking CXOs (2025–2027) ——- “Cloud is not optional. Gen AI is your new call center agent. Governance is your survival kit.” “2026 is the year of intelligent lending. MSMEs will remember who said yes first.” “By 2027, if your AI isn’t making decisions, you’re just a digital paper-pusher.” • Year 2025 = Foundation → Hybrid Cloud + Gen AI CX + AI Governance. • 2026 = Acceleration → Intelligent MSME Lending + Agentic AI Pilots. • 2027 = Transformation → Agentic AI at scale + Cloud-Native Core. “RBI has constituted a high level committee in Dec 2024 to draft a Framework for Responsible & Ethical Enablement of AI (FREE-AI) for the financial sector. Either Indian banks run through it with AI and cloud, or fintechs will.” ### 0–12 Months (2025) → Lay the Tracks or Get Left Behind • Hybrid Cloud as Default: Stop debating. Move analytics, non-core apps, and CX platforms to hybrid cloud. RBI is now planning its own Indian Financial Services (IFS) Cloud to provide local cloud storage to financial firms, which lowers a major barrier (i.e. cost + infrastructure) to localization. • Generative AI for Frontline CX: Deploy Gen AI copilots in call centers and chatbots. If your customer still hears “please hold the line” in 2025, you’re losing the next-gen. • Regulatory-First AI Governance: Stand up an “AI Risk & Compliance Office.” Whoever cracks explainability + RBI alignment first will dominate lending in 2026. ### 12–24 Months (2026) → Shift Gears to Intelligent Banking • Generative AI in MSME Lending: Underwrite loans in days, not weeks, using AI-driven document parsing & bureau APIs. Whoever solves MSME credit at scale wins Bharat. • Agentic AI Pilots: Roll out controlled task automation — invoice processing, compliance checks, trade finance ops. Keep “human-in-loop” but push for autonomy where safe. • Hybrid Cloud for Risk & Treasury: Run real-time stress tests and liquidity dashboards in cloud. Compete with fintechs on speed, not just balance sheet size. ### 24–36 Months (2027) → The Leap or the Legacy • Agentic AI in Production: Move beyond pilots. Automate 30–40% of operational workflows — settlements, onboarding, loan servicing — under strict RBI-compliant guardrails. • Gen AI in Corporate Banking: Use AI copilots to analyze contracts, risk, and treasury exposures — if your corporate client has to wait for reports, you’ve lost them to global banks. • Cloud-Native Core: Start migrating parts of the core banking stack (retail deposits, credit cards) to hybrid cloud. Legacy CBS ≠ future growth. #Indianbanking #agenticai #Genai #hybridcloud #regulatoryreforms #BCG

Fintech Rundown: A Rapid Review of Weekly News The final week of October is always a little extra spooky, as it signals that the start of the holiday season is just days away. The week also generally brings an onslaught of company announcements, as organizations rush to publish their latest news before audiences become distracted by the holidays. Here is some of the biggest news from this week so far. We’ll continue adding news to this post throughout the week, so stay tuned! Payments Mastercard and Citi bring Citi Flex Pay Installments to more retailers at checkout. Worldpay unveils AI-powered 3D Secure optimization service to increase payment approvals. PayQuicker announces Flex, a business-ready stablecoin alternative for global payouts. Bold.org partners with Wildfire to launch first debit card rewards program for purchases on AI platforms. Lending U.S. Bank Avvance launches customized embedded financing offering. Investing Clearwater Analytics and J.P. Morgan Asset Management launch automated cash management solution for hedge funds. Fraud, security, and compliance Trulioo reports 1,996% growth in US Know Your Business (KYB) transaction volume since 2023. ThetaRay and Kaufman Rossin announce AI AML model validation. Photo by Juan Felipe Ramírez The post Fintech Rundown: A Rapid Review of Weekly News appeared first on Finovate. https://lnkd.in/gnnwPkiS via Finovate https://finovate.com/

🌮 Weekly Fintech Wrap 🌮 This week in #fintech: #agenticAI lands in real payment flows, #KYC and fraud checks get embedded & real-time, and wallets & automation redraw the flow of money. 🤖 𝗔𝗴𝗲𝗻𝘁𝗶𝗰 𝗔𝗜 𝗖𝗹𝗼𝗰𝗸 𝗜𝗻 𝗳𝗼𝗿 𝗗𝘂𝘁𝘆 🧾 National Payments Corporation Of India (NPCI) × Razorpay × OpenAI just made “pay with UPI” possible inside ChatGPT. A small step for prompts, a big leap for payments. https://lnkd.in/gQJpJy2Y 🧭 Prometeo drops Agentic Banking, where AI agents can actually move money, check balances, and run #treasury ops on their own. 🔗 https://lnkd.in/g5VT7ztR 🧩 Bud Financial’s new MCP Server gives AI agents a secure way to query bank data - think of it as “compliance-approved autonomy.” https://lnkd.in/edxFtKxz 🛡️ 𝗙𝗿𝗮𝘂𝗱, 𝗞𝗬𝗖 & 𝗗𝗲𝗲𝗽𝗳𝗮𝗸𝗲 𝗗𝗲𝗳𝗲𝗻𝗰𝗲 𝗚𝗼 𝗣𝗿𝗼𝗮𝗰𝘁𝗶𝘃𝗲 ⚡ LSEG’s World-Check Verify (powered by Amazon Web Services (AWS)) now lets banks screen users and transactions in real time, right inside their payment flows. https://lnkd.in/gJGa2tV8 🇲🇾 Bank Negara Malaysia × PayNet (Payments Network Malaysia) are building an AI fraud detection system to flag scams before they go through. 🔗 https://lnkd.in/g4Qn43sw 🔐 Proof launches Certify, a #cryptographic tool to spot AI-generated fakes and verify real media - #deepfakes just met their match. 🔗 https://lnkd.in/gFBHhTUT 🛒 𝗪𝗮𝗹𝗹𝗲𝘁𝘀, 𝗗𝗮𝘁𝗮 & 𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗼𝗻 𝗚𝗲𝘁 𝗮 𝗟𝗶𝗳𝘁 🌏 Alipay+ expands its travel payments ecosystem, turning mobile wallets into global spending passports. 🔗 https://lnkd.in/ejmZPmBh 🛍️ Zilch unveils an AI data platform that tells retailers what your next move might be before you make it. 🔗 https://lnkd.in/gTKbQitP 🧾 iBanFirst brings iBanPay to the UK - an AI assistant that turns invoices into ready-to-approve payments. 🔗 https://lnkd.in/gd2Egtyk #APIX #InnovationPlatformAsAService #CollaborateToInnovate

💥 AI-Driven Payments – The Silent Revolution!! What if the most transformative change in payments wasn’t visible at all? In 2025, AI is quietly running the global payments engine scanning trillions of data points in milliseconds, spotting fraud patterns before they even happen. And yet, most consumers have no idea how much intelligence is working behind the scenes every time they tap “Pay Now.” 💡 Why Secure Payments Matter More Than Ever? As digital payments become our daily default from Apple Pay at your local café to PayPal’s one-click checkout trust has become the real currency. For banks and Fintech’s, AI isn’t just an optimization tool. It’s the foundation for customer confidence. In 2024 alone, Stripe’s AI-powered risk engine prevented $5 billion in potential fraud losses. Mastercard’s Decision Intelligence now evaluates each transaction using real-time behavioural analytics cutting false declines by up to 30%. And in India, RBI-backed UPI systems now leverage AI for pattern-based fraud alerts, protecting millions of small digital merchants. 📊 How AI Is Transforming Payment Security? By 2030, AI-driven systems are expected to boost fraud detection accuracy by 20–30%. Already, leading platforms are applying: ✅ Predictive modelling to flag unusual spending behaviour in milliseconds. ✅ Biometric verification (like facial and fingerprint recognition) for seamless authentication. ✅ Adaptive learning models that evolve with every transaction, making each payment smarter and safer than the last. Banks leveraging these innovations are seeing measurable results: 1️⃣ 20% drop in chargebacks. 2️⃣ Lower operational costs. 3️⃣ Higher customer satisfaction scores. 🚀 Leadership Takeaway The leaders in payments aren’t just adopting AI, they’re redefining trust at scale. The winners will be those who combine: 💠 Proactive protection. 💠 Frictionless experiences. 💠 Radical transparency around data privacy. 🔍 Your Turn How is your organization balancing frictionless payments with heightened security in 2025? Are you using AI to stay one step ahead of fraud or waiting to react? #AIPayments #FintechSecurity #DigitalTrust #PaymentsInnovation #AITransformation #FutureOfPayments #FintechLeadership