AI in digital payments: the new UPI business model

The signal from India: why it matters in Europe too

In late June 2026, TechCrunch reported statements by Dilip Asbe, CEO of NPCI (National Payments Corporation of India). Asbe stated clearly that AI will be deeply involved in the next era of digital payments growth. In particular, he noted that new UPI apps could compete more effectively only if they have a truly sustainable business model.

This scenario may seem far from the Italian reality. Yet UPI is now the global benchmark for real-time payments. It processed over 131 billion transactions in fiscal year 2024-25 alone. As a result, the dynamics emerging there often foreshadow what will happen in Western markets 12-24 months later.

So for marketing managers and digital leads at Italian companies, especially in retail, B2B and fintech, reading these signals early is a real competitive lever.

The numbers reshaping the global payments market

The global digital payments market is now worth over $11 trillion. According to the McKinsey Global Payments Report, growth is robust, but pressure on margins is just as strong. Commoditization of basic payments has eroded the profitability of traditional players.

Moreover, the rise of instant payments, driven in Europe by the EU Instant Payments Regulation that came into force in 2025, has sped up the need to find new revenue sources. So the central question is no longer how to grow volumes, but how to monetize smartly.

In this context, AI acts as an enabler of three key levers:

• Personalization of the commercial offer in real time, based on the user's payment behavior.
• Predictive fraud detection and risk scoring, which cuts operating costs and boosts user trust.
• Dynamic optimization of fees and pricing models, adaptable to the transaction context.

There are also emerging applications based on analyzing aggregated data to build spending profiles useful for third-party marketing, with all the regulatory implications that entails, particularly under the European GDPR.

From the UPI lesson to the Italian context: three strategic takeaways

The Indian case offers three takeaways that apply directly to the Italian market. First, the question of the revenue model. UPI was designed as free infrastructure for the end user. As a result, the apps built on it have struggled to find margins. AI now makes it possible to build value-added layers, such as recommendations, analytics and embedded financial products, that justify indirect monetization.

Next comes the issue of competition between apps. As with Asian super-apps, Europe too is seeing concentration around a few dominant players (Revolut, Klarna and, in Italy, Satispay). However, AI lowers the barrier for newcomers who know how to use it well. So the big incumbents don't necessarily have an insurmountable advantage.

Finally, there's the matter of trust and user experience. AI in payments isn't just backend. It's also conversational interfaces, proactive support and smart notifications. That's why companies that integrate AI into the payment experience measurably improve retention and NPS.

Operational implications for marketing managers and digital leaders

If you manage digital marketing strategies at a company with an e-commerce or fintech component, the implications are concrete. Payment is no longer the end of the funnel: it's a touchpoint rich in data and engagement opportunities.

So it's worth considering a few practical directions:

• Integrating CRM and payment data: AI can correlate purchase behavior and payment methods for more precise segmentation. This fuels more relevant campaigns on Google Ads and LinkedIn.
• AI-based loyalty programs: predictive models let you offer incentives at the right moment, increasing conversion rates and reducing churn.
• Content and SEO for fintech: growing interest in digital payments and AI generates significant search volumes. A targeted SEO and copywriting strategy can capture qualified demand.
• AI applied to campaigns: SHM Studio's AI services include automatic optimization of budgets and messaging, with a direct impact on ROAS.

Beyond that, B2B companies should monitor the evolution of embedded payments in management software. This integration is redefining purchasing processes and, as a result, the touchpoints you can market on.

Work still in progress: risks and variables to watch

That said, the path isn't free of obstacles. So it helps to map the main risk variables for anyone looking to move into this space.

The first issue is regulatory. AI applied to payment data directly touches the GDPR, PSD3 (being transposed) and the guidelines of the European AI Act. As a result, any initiative must be designed with a privacy by design approach from the architecture up.

The second issue is technological. As Gartner highlights in its analyses of AI in financial services, many organizations underestimate the complexity of integrating legacy systems with AI models. So data governance is often the main bottleneck.

The third issue is cultural. Adopting AI in payment processes requires a change of mindset within organizations. It's not just about implementing a tool, but about redesigning decision flows and KPIs. That's why change management is an integral part of the project.

In short, the opportunities are real and significant. But they call for a structured approach, not an improvised one.

The SHM Studio perspective: where the game will be played over the next 24 months

At SHM Studio, we watch this evolution with strategic interest. The convergence of AI, digital payments and marketing isn't a niche topic: it's set to redefine entire industries by 2027-2028.

For Italian SMEs and mid-market companies, the window of opportunity is open. But it will close fast as larger players consolidate their positions. As a result, acting early, even on seemingly minor aspects like checkout optimization or post-payment personalization, can make all the difference.

What's more, AI isn't a investment separate from marketing: it multiplies the initiatives you already have running. So the first step isn't necessarily to build proprietary models, but to integrate artificial intelligence into your existing touchpoints, from your website to your campaigns, from your web presence to your conversion funnels.

If you want to explore how these dynamics apply to your specific context, you can contact the SHM Studio team for a preliminary analysis. You can also find regular analysis and updates on AI, digital marketing and emerging technologies for the Italian market on the SHM Studio blog.