Gen AI, Agentic AI set to transform India's rapidly-growing payments sector

Gen AI and Agentic AI are expected to significantly impact the country's payments landscape, where digital payments are growing at a rapid pace, according to a survey released on Wednesday.

Leading consultancy PwC India's report titled 'The Indian Payments Handbook: 2025-30' said that while UPI remains central, the next wave of transformation in the fintech and payments space will be spearheaded by credit cards, followed by BBPS (Bharat Bill Payment System).

The report, based on a survey of over 175 senior leaders in the fintech and payments sector, showed that 65 per cent ranked credit cards as the top growth segment, with over 90 per cent believing in their promising growth potential.

"The influence of AI is another dominant theme, as 73 per cent of respondents expect Gen AI and Agentic AI to significantly impact the payments landscape," it said.

PwC India's report further said digital payments in India are expected to continue their rapid growth trajectory, with overall transaction volumes projected to nearly triple by FY30.

This growth, it said, will be driven by innovations across the ecosystem, increasing credit penetration, regulatory support, adoption of emerging technologies and evolving consumer behaviour.

"India's payments ecosystem is entering a new phase of maturity and integration. Over the next five years, we expect continued innovation and expansion of UPI, strong credit growth, and increasing convergence of payments with lending, insurance, and wealth," said Mihir Gandhi, Partner and Leader - Payments Transformation and Fintech at PwC India.

The key will be balancing innovation and scale with interoperability, security and inclusion, to create a digital payments economy for the future, he said.

The report further said UPI continues to be the backbone of India's digital payments ecosystem, accounting for nearly 90 per cent of retail digital payment volumes in FY2024-25.

Its growth is driven by offline adoption, interoperability, credit-linked use cases and emerging opportunities such as cross-border transactions (cited by 22 per cent of survey participants).

A favourable regulatory environment is also enabling this shift, with 70 per cent of respondents pointing to tokenisation and the RuPay-UPI linkage as key enablers, while 66 per cent see hyper-personalisation, easier authentication and credit on UPI as critical success factors.

Alongside UPI, credit cards remain a strong growth driver, crossing 100 million in FY24 and projected to double to 200 million by FY30, with robust transaction growth fuelled by product innovation and wider adoption.

Debit cards, however, continue to decline as consumers increasingly prefer UPI and credit, the report said.

As one may glean, the report said India's digital payments journey is no longer just about volumes - it's about unlocking value.

Value that is hidden in building a future-proof, resilient, inclusive and globally advanced digital payments ecosystem, wherein the next five years of this journey will be defined by data-driven, customer-centric innovation, the PwC India report added.