The Reserve Bank of India has introduced 'UPI Tap and Pay' and the AI-powered 'MyUPI' platform at the Global Fintech Fest. These features enable contactless, PIN-less payments for small transactions and provide users with advanced fraud control tools. The move aims to increase UPI's footprint in the physical point-of-sale market, potentially impacting traditional card payment volumes.
The Reserve Bank of India has introduced two major updates to the UPI ecosystem aimed at streamlining contactless payments and enhancing user security. Announced by RBI Governor Sanjay Malhotra at the Global Fintech Fest (GFF) on September 10, 2026, these features—UPI Tap and Pay and MyUPI—are designed to shift UPI usage further into the physical point-of-sale (POS) segment, where card payments have traditionally dominated.
UPI Tap and Pay allows users to make contactless payments at compatible merchant terminals using near-field communication (NFC) technology. Users can simply tap their smartphones on a supported POS terminal to complete a transaction without needing to open a UPI app. A key convenience for users is that the payment process utilizes the internet connectivity of the merchant terminal itself, reducing reliance on mobile data. Transactions up to ₹5,000 can be processed without entering a UPI PIN, while any amount exceeding this limit will require standard PIN authentication at the terminal.
The second major rollout, MyUPI, is an AI-powered platform developed by the National Payments Corporation of India (NPCI). Built on the Finance Model for India (FiMI) small language model, MyUPI acts as a centralized dashboard. It allows users to view all their UPI transactions and AutoPay mandates across multiple banks and applications in one place. Crucially, the platform includes a 'Safety Switch' that lets users block or decline debit transactions if they suspect their account has been compromised. It also offers features like UPI number delinking and automated chargeback processing.
For the digital payments sector, these features represent a direct challenge to the traditional credit and debit card network model. By enabling NFC-based payments, UPI is entering a domain previously reserved for physical cards, which could pressure card networks like Visa and Mastercard in the merchant-payment space. Payment aggregators and banks may now need to focus on upgrading their existing POS infrastructure, as the new facility requires both the merchant terminal and the user's smartphone to be NFC-enabled.
Investors should monitor the pace of infrastructure adoption, as the widespread success of Tap and Pay depends on how quickly merchants upgrade their POS terminals to support the new standard. There is also an operational risk; while the PIN-less feature adds speed, it also requires heightened device-level security, as the phone effectively acts as a payment card. The market will likely observe whether these features lead to a shift in transaction volumes away from cards toward UPI for smaller ticket purchases.
Looking ahead, the next important update will be the scale and speed of the rollout by banks and payment service providers. Investors may track commentary from major payment aggregators and large retail banks regarding the capital spending required to upgrade POS networks and the impact this shift might have on transaction fee structures and overall digital payment margins.