Synopsis– NPCI has introduced several major upgrades throughout 2025 to enhance security, stability and user experience. This article notes down 7 major important in UPI in 2025.
UPI will evolve in 2025 to fulfill its role as India’s digital backbone, with important changes focused around being more automated, being more convenient, and being more relevant in a world that will be much more automated using AI and biometrics while empowering users to have more control and autonomy.
7 Major Changes implemented in UPI 2025
1. Face ID Payments and AI Support
- On October 8, 2025, Face ID biometric authentication is scheduled to launch in select UPI apps, and within at least three months, it is expected to cover over 30% of all monthly UPI payments, mostly within the smartphone community who prefer secure contactless options.
- AI-facilitated fraud detection and transaction personalization practices have cut fraud attempts by 15% and transaction speeds have improved by 12% in major UPI apps.
- Pros:
- The key benefit is increased security through biometric face recognition versus PIN entry which reduces the risks of theft of password exposure.
- A second benefit is the use of artificial intelligence to detect fraud patterns in real time while personalizing user shortcuts to facilitate safer payment experiences.
- Cons:
- Reliance on smartphone hardware capabilities can create barriers for users on low-level or older-generation devices.
- There can be personal privacy concerns with collecting biometric data as well as AI monitoring.
2. Biometric Payments via Aadhaar
- Biometric Aadhaar-based UPI payments have brought about reduced digital financial exclusion, with more than 20% of the increased activity occurring in rural areas since beginning service in Q3 of 2025.
- Today, an estimated 15% of all UPI payments in rural areas feature some level of fingerprint or iris biometric authentication, allowing digitally marginalized sub-groups to transact with more confidence.
- Pros:
- It increases financial inclusion as it secures payments for users in rural regions or those without smartphones.
- Fast and easy authentication increases transaction speed and access.
- Cons:
- Biometric infrastructure (fingerprint/ iris scanners) is required, which may not be available in all areas.
- There may be privacy and data security concerns associated with linking it to Aadhaar.
3. UPI Reserve Pay
- Early data indicated that Reserve Pay payment mandatories covered an estimated 5% of all ongoing billing-based UPI subscriptions per month. Since introduction, Reserve Pay transactions grow at a rate of 2% every month due to the general acceptance of subscription-based services.
- Reserve pay payments have succeeded most notably in online travel bookings, OTA/OB streaming subscriptions and utility payments, helping add payment certainty and user optionality in payment experiences.
- Pros:
- Enables temporary reservations of funds in your bank account for seamless recurring payments like for subscriptions and travel.
- Provides certainty of cash flow to the merchant and the user by minimizing payment failures.
- Cons:
- The user has to keep a reserved balance which may limit liquidity and flexibility.
- It may add another layer of complexity that may initially confuse some of the non-technology-savvy users, especially the elderly population.
Also read: Top 10 UPI Apps with Highest Transactions in September 2025; See Who Leads the Chart
4. AI Chat Support for UPI
- AI chat support assistants have been incorporated into the main UPI apps, with over 10 million AI chat interactions per month which support transaction troubleshooting and payment completion.
- User satisfaction scores attributed to AI support have increased by 18% relative to Q1 of 2025, supporting especially first-time users and senior citizens.
- Pros:
- Allows 24/7 instant assistance for troubleshooting problems and making payments via voice or text.
- It allows for increased user accessibility especially for new users and elderly users.
- Cons:
- AI chatbots can sometimes become confused by longer or more complicated questions and may not understand the user’s problem/questions leading to more frustration.
- It requires a mostly reliable internet connection and the app therefore is less useful in offline or low-bandwidth circumstances.
5. Payments via IoT devices using UPI
- Payments using IoT devices include smart meters, EV chargers, and toll payments, of which account for approximately 0.5% of the total UPI volumes which is growing quickly at a 50% Q-o-Q growth.
- This is gaining traction especially in smart city zones and urban infrastructure pilots
- Pros:
- Facilitates seamless and automated transactions from intelligent devices, contributing to smart city frameworks and facilitating novel use cases associated with EV charging.
- Lowers the necessity for manual transactions, improving usability.
- Cons:
- Demands widespread adoption of IoT devices and properly integrating them, which is developing.
- Security concerns arise if IoT devices are compromised, affecting users’ accounts.
6. Banking Connect
- This connects banking functionality within UPI apps, enabling services like real-time mini statements and requests that entice 20% of UPI users to utilize some of the banking features within their payments app.
- This cross-functionality deepens user engagement and expands the utility of UPI beyond payments.
- Pros:
- Provides real-time banking intelligence and services within UPI applications, making it more flexible for users to manage their finances.
- Creates a bridge between payments and banking services, which may lead to increased usage and adoption of banking services by the user.
- Cons:
- The enhancement of banking capabilities may add complexity to the experience of users in simply making payments.
- Greater data sharing also raises issues around security and privacy.
7. Unified AutoPay Mandate Management (by Dec 31, 2025)
- Pilot programs indicate that 70% of users in recurring payments usage said they were willing to engage in one place, in a centralised manner, to view, pause, or cancel their subscriptions.
- This is expected to create a more unified and easier way for users to manage these functions, while reducing payment disputes for 25% of users next year.
- Pros:
- Gives the user centralized management of their recurring payments across apps, which provides greater control and visibility for the user.
- Makes subscription management easier and removes friction related to payment disputes.
- Cons:
- The user will need to adopt a new centralized method for managing their payments which may take time getting used to.
- Relying on the degree of the benefits, the results depend on the compliance of the entire ecosystem. Partial adoption of the ecosystem could create confusion.
Effects on Users and Ecosystem
- These upgrades have made UPI more secure, transparent, and focused on users than ever, utilising intelligent automation and a holistic approach to control.
- Integration of AI, biometrics, and IoT into services, indicates India’s move towards frictionless, intelligent, and hyper-personalised digital finance, also leading to empowered citizens for a digital first future.
Conclusion
The UPI 2025 advancements will give the user more agency and promise better safety while helping India become one of the preeminent nations for digital payments. Every evolution pushes UPI closer to a smarter, safer, and more equitable financial ecosystem.
Written By Rachna Rajput
