The National Payments Corporation of India (NPCI), the government agency behind digital-identity database Aadhaar and UPI, the free mobile-payments service, is now calling in new tactics to extend its reach.
Praveena Rai, COO, rang in the new strategy, called Pay123, at this week’s Global Fintech Fest. She says NPCI is turning to artificial intelligence to transform the humble feature phone (not smartphones) into a tool to enable people to make payments verbally.
NPCI’s job is to execute the vision of the
Reserve Bank of India to enable everyone to make a digital payment anywhere in
the country, at any time.
“Do we have the quality of connectivity to commit to that?” she asked. The “everyone” aspect of the task is especially difficult, because it forces NPCI to wrestle with big social challenges, including affordability, literacy, and the ability to confirm one’s identity.
India, like many emerging markets, still
has a substantial portion of its population in poor and remote villages, some
of which aren’t even connected to the internet.
Although there are 1.2 billion smartphones
in India, that doesn’t mean everyone has one. Many people rely on feature
phones that lack a data component.
Literacy is another problem: 26 percent of
Indians are illiterate. There are 121 languages spoken in India, so even if
people are literate, they may not understand Hindi, Tamil, or other major
languages. Only about 5 percent of Indians speak English. However, mobile apps
and customer service teams tend to operate only in the most popular languages.
Aadhaar in theory has covered the
population but the proportion of active users is low, with only about 340
million people out of the 970 million above the age of 14 registered using its
debit card as a source of identity.
Rai said, “We need payments that work over a phone line, under unstable data conditions, that leverages Aadhaar-based registrations, and involves just speaking – no reading or typing. These are the triggers to solve this.”
Hanging on the telephone
Voice, on the other hand, is back in vogue
– whether it’s via virtual assistants, communicating via WhatsApp or other
voice-over-internet protocols (VoIPs), or people using a new breed of hybrid
handhelds that enable VoIP on feature phones.
Now NPCI can even turn an analog phone call
into a digital payments message.
“This will bring digital payments to the
next 500 million people,” Rai said. “Promoting the cashless model will
contribute to economic growth.”
Rai says the agency has worked with a variety of fintechs (which she didn’t name) to make this happen. The user calls a number associated with Pay123 and verbalizes their payment instruction, which includes inputting a UPI account number to serve as their identifier. An A.I., using automatic speech recognition, converts this to text. (People using hybrid phones with a camera can also scan a merchant’s QR code.)
Then the machine translates that text into
English and interprets the command, using natural language processing. Finally,
the system reverses the flow, turning the English-text command into a verbal
confirmation in the user’s spoken language, so they can confirm the
To make all of this work involves building
a lot of libraries and databases. Rai says at present, 123Pay’s accuracy is 80
percent, but higher for simple payments, because they only require a simple
vocabulary of commands.
“Payroll send 500 rupees – that’s just four words, with focused intent and limited context,” Rai said. The A.I. will improve for more complex instructions with usage.
One way or another
NPCI is working with fintechs and banks to
develop use cases. The simplest is requesting a money transfer between
accounts. Now this can be done on a payphone, just like using the UPI mobile
app. Payments are now possible for topping up mobile phones, making insurance
payments, and cash-on-delivery instructions, to enable e-commerce.
The most common use case is paying
electricity bills. The NPCI is working with India’s biggest energy companies to
extend this to all households so they can pay for gas and other utilities. Rai
says there is about 2 lakh (200,000) households using 123Pay to pay gas bills.
“The possibilities for using voice are
endless,” Rai said, imaginging scenarios such as ordering fuel or buying a
parking spot while sitting in your car; using internet-connected devices to
verbally order groceries; or making an online purchase with just a merchant’s
UPI identifier (from watching a TV ad, for example).
As people use the service they will also be
building a credit profile, while merchants can begin to use voice to access
working capital. The data will become a building block for another generation
of fintech companies, with the market opportunity expanding in line with usage,
which will continue to refine the algorithms.
“The next set of unicorns will emerge from
this ecosystem,” Rai said, noting that there is a lot of room to add
voice-enabled services by regions and language group, as well as other customer