Evolving nature of digital payment system in India

The payment landscape in India is evolving everyday.

To discuss this leading Indian think tank Chintan Research Foundation (CRF), held a conclave on Digital Payments, in New Delhi. In partnership with Ikigai Law and Koan Advisory Group, CRF brought together policymakers, regulators, industry leaders, legal experts, technologists and researchers to deliberate on these emerging policy challenges and the institutional frameworks required to address them.

India has emerged as one of the world's leading digital economies, underpinned by rapid advances in Digital Public Infrastructure (DPI), widespread adoption of digital payments and a vibrant innovation ecosystem. In his welcome address,Sanjeev Ahluwalia, Distinguished Fellow, CRF, described the digital economy as a cornerstone of India's future economic and social advancement.


While digital payments have transformed financial intermediation, expanded access to formal financial services and improved economic efficiency, they have also heightened concerns relating to cross-border payments, digital fraud, cybersecurity, data governance and regulatory coordination. Therefore, sustaining India's digital leadership will require balancing innovation with trust, resilience and consumer protection.

The evolution of India's digital economy and the role of DPI in driving long-term growth formed the base of the discussions of the inaugural session. Dr. Deepak Mishra, Distinguished Visiting Professor at ICRIER, argued that digitalisation cannot be imported but must be built upon strong analogue foundations of human capital, institutional trust and sustained investment. He also emphasised that today's AI users will become tomorrow's innovators, underscoring the importance of informed engagement with emerging technologies rather than technological pessimism.

Building on this, Dr. Rajat Kathuria, Dean, School of Humanities and Social Sciences, Shiv Nadar University, described DPI as an economic organisation built on trust, with productivity gains increasingly driven by research, data infrastructure and high-value digital services. At the same time, he cautioned against "digital determinism", stressing that technological advancement must remain inclusive and should not compromise safeguards around identity, consent and accessibility.

The conclave further highlighted the importance of ensuring that digital transformation remains socially inclusive. Aparajita Bharti, Co-founder of The Quantum Hub, expressed her concern that while mobile phone ownership has become nearly universal, access to larger digital devices remains limited, particularly among vulnerable sections of society.

Since technology alone cannot overcome existing social inequalities, greater public investment is needed in grievance redressal mechanisms and consumer protection, especially for women, the elderly and other marginalised communities.

Discussions on the future of payment systems focused on India's growing global role and the next phase of innovation in digital payments. Dr. Balakrishnan Mahadevan, former Chief Operating Officer, NPCI, observed that while UPI's first decade had been defined by interoperability and scale, the next must prioritise resilience, redundancy and AI-enabled fraud detection. Panellists also deliberated on the opportunities presented by cross-border payment systems and the need to strengthen interoperability, harmonised standards and international cooperation to facilitate faster, more secure and cost-effective global transactions.

Ashok Lavasa, former Finance Secretary, emphasised that integrated infrastructure, harmonised standards, legal congruence and clear jurisdictional frameworks would be critical for the internationalisation of India's payment systems.

Examining the evolving role of cryptocurrencies, stablecoins, virtual digital assets (VDAs) and the digital rupee,Megha Sidhu, Officer on Special Duty (Joint Commissioner), FATF Cell, Department of Revenue, clarified that India's approach remains rooted in technological neutrality and risk-based regulation, with the Financial Intelligence Unit–India overseeing virtual asset service providers from an AML/CFT perspective. There was a unanimous agreement that while emerging payment technologies offer significant opportunities for innovation, regulatory frameworks must continue to evolve in tandem with technological developments.

Digital fraud and cybersecurity featured prominently throughout the conclave. Panellists noted that financial frauds are becoming increasingly sophisticated, driven by advances in phishing, identity theft and social engineering.

Abhinav Kumar, Director General of Police, Uttarakhand, highlighted the growing jurisdictional and enforcement challenges confronting law enforcement agencies, while Atul Kumar, Head of Government Affairs, Data Security Council of India (DSCI), called for a shift from an "audit-ready" to an "attack-ready" cybersecurity posture. Discussions also underscored the need for stronger institutional coordination, enhanced consumer awareness and more proactive regulatory interventions to safeguard confidence in India's digital financial ecosystem.

As digital technologies continue to reshape financial systems, the deliberations reinforced the importance of balancing innovation with trust, consumer protection and institutional preparedness. The insights emerging from the conclave are expected to contribute meaningfully to the evolving policy discourse on building a secure, inclusive and globally competitive digital payments ecosystem in support of the vision of Viksit Bharat @2047.