The National Payments Corporation of India (NPCI) is gearing up for a game-changing leap in digital payments. Its upcoming upgrade—UPI 3.0—is designed to bring Internet of Things (IoT) integration into the Unified Payments Interface (UPI) ecosystem, enabling automated, device-to-device payments through smart appliances and gadgets.
In simpler terms, you may soon be able to make UPI payments not just from your smartphone—but from your fridge, smartwatch, car, washing machine, or even your TV.
How It Works: UPI Meets IoT
The Internet of Things (IoT) allows connected devices with embedded sensors and software to communicate and perform tasks over the internet without human input. NPCI plans to leverage this technology by building on existing UPI features such as UPI Autopay and UPI Circle.
Under the new framework, users will be able to:
- Assign mandates to smart devices via their primary UPI app.
- Generate secondary UPI IDs tied to each device.
- Enable automated, permission-based payments for recurring services (e.g., monthly groceries from a smart fridge, or EV charging from your car).
Launch Timeline: Expected by October 2025
The official announcement of UPI 3.0 is expected during the Global Fintech Fest 2025, to be held in Mumbai in October, pending final regulatory approvals.
According to NPCI sources, each smart device will be able to transact autonomously within predefined transaction limits, which are currently under discussion.
Enhanced User Experience and Privacy
The goal is to simplify and secure daily transactions by:
- Enabling hands-free payments
- Allowing distinct UPI IDs per device for better traceability
- Offering mandate-based controls for added security
Recognizing the potential privacy concerns, NPCI is also working closely with regulators to ensure compliance, data encryption, and fraud prevention measures are baked into the system architecture.
UPI’s Growth: A Strong Foundation for Innovation
UPI continues to dominate India’s digital payments landscape. In FY 2024-25, the platform processed 185.8 billion transactions, marking a 41.7% year-on-year increase. According to the RBI, UPI now accounts for 83% of all retail payments in the country.
Globally, the autonomous payments market is also on a sharp growth trajectory, with projections from Global Market Insights estimating a CAGR of over 40% from 2024 to 2032.
Conclusion: A Glimpse Into the Future of Payments
With UPI 3.0, India is not just innovating—it’s redefining how digital payments can seamlessly integrate into everyday life. If successful, NPCI’s vision could turn homes, cars, and wearables into financial tools, making autonomous payments a new normal in one of the world’s most dynamic fintech ecosystems.