UPI Tap and Pay, MyUPI and OneTag Unveiled at Global Fintech Fest 2026

🗞️ Why in News The Global Fintech Fest (GFF) 2026 convened in Mumbai from 8 to 11 September 2026. Reserve Bank of India Governor Sanjay Malhotra unveiled UPI Tap and Pay (an NFC-based, PIN-less payment mode for transactions below Rs 5,000) and MyUPI (an AI-powered unified support layer for UPI, powered by the National Payments Corporation of India’s in-house small language model FiMI). Union Minister for Road Transport and Highways Nitin Gadkari separately launched OneTag, a FASTag portability system built jointly by IHMCL (Indian Highways Management Company Ltd) and NPCI, accessed through NHAI’s Rajmargyatra app.

The Three Launches in One Table

UPI Tap and Pay: How It Works

UPI Tap and Pay uses Near Field Communication (NFC) to trigger a payment when a UPI-enabled device is tapped on a merchant point-of-sale reader (or another user’s device). For transactions below Rs 5,000, the payment completes without PIN entry, following the RBI’s Additional Factor of Authentication (AFA) relaxation framework already applied to small-value card payments.

Above that threshold, standard UPI PIN authentication continues to apply. The design mirrors India’s tap-to-pay card ecosystem while keeping UPI’s account-to-account, no-interchange architecture. The instrument is aimed at retail merchants, kirana stores and transit points where a QR-scan-and-PIN flow is time-consuming.

MyUPI and FiMI: An AI Support Layer

MyUPI is a unified, AI-powered assistance surface for UPI. Complaints, mandate management, autopay adjustments, refund queries and dispute status all become conversational rather than click-through. The engine is FiMI (Financial Multilingual Intelligence), an NPCI-built small language model trained on Indian payment idiom across languages, expressly designed for financial-services conversation.

The choice of an in-house model, rather than a general-purpose commercial LLM, is deliberate: it keeps training data and model weights within the payment ecosystem, addresses data-localisation obligations, and gives NPCI direct control of the model’s behaviour on regulated financial content.

OneTag: Portability for the FASTag Stack

FASTag is India’s RFID-based electronic toll collection instrument, mandatory on national and many state highway toll plazas since 2021. Each FASTag is currently issued by a bank; a user changing bank must obtain a new tag, and closing an old bank relationship is friction-prone.

OneTag implements portability of the FASTag across issuing banks, functioning conceptually like Mobile Number Portability (MNP) for tolls. The system is jointly built by:

The Institutional Cast

RBI is the central bank; Governor Sanjay Malhotra is the 26th Governor, in office since December 2024.

NPCI (National Payments Corporation of India) is a not-for-profit company under Section 8 of the Companies Act 2013, incorporated in 2008 by the RBI and the Indian Banks’ Association as an umbrella organisation for retail payment systems in India. It operates UPI, IMPS, Bharat BillPay, FASTag (NETC), RuPay and AePS.

IHMCL is an NHAI-promoted company that operates the National Electronic Toll Collection (NETC) programme; it operates FASTag on the ground.

NHAI is a statutory authority under the National Highways Authority of India Act, 1988 under the Ministry of Road Transport and Highways.

Why This Trio Matters

Each launch addresses a different friction in India’s digital payment stack:

1. UPI Tap and Pay closes the speed gap with card networks at retail POS; UPI’s account-to-account architecture keeps costs to the merchant lower than card interchange.
2. MyUPI raises the reliability floor of the system by making support conversational, reducing the drop-off from failed transactions.
3. OneTag injects competition into the FASTag issuance market by allowing users to switch banks without switching tags; classic pro-competitive market design.

UPSC Relevance

GS Paper 3. Digital economy; financial-technology and payments; role of institutions in market design.

The Mains framing. The three launches together deepen India’s Digital Public Infrastructure (DPI) at the payment layer. UPI Tap and Pay extends UPI’s dominance into contactless POS territory. MyUPI addresses the reliability gap through AI-based support. OneTag introduces portability into a segment (FASTag) where switching cost was structurally high. Each is a discrete design choice; together they express a coherent regulatory posture: keep UPI open, keep users mobile, keep support intelligent.

A question worth preparing. “Evaluate the launches at Global Fintech Fest 2026 (UPI Tap and Pay, MyUPI, OneTag) as instances of Digital Public Infrastructure-led market design in India. (250 words)”

The counterpoint to hold. UPI has zero-MDR (Merchant Discount Rate) for person-to-merchant transactions, which is a subsidy to merchants and a challenge to the sustainability of payment-service-providers. As NPCI expands support (MyUPI, dispute redressal), the cost of running the system rises. The unresolved policy question is who bears these costs at scale.

📌 Facts Corner, Knowledgepedia

Prelims, statement-ready facts:

• Global Fintech Fest 2026 was held in Mumbai from 8 to 11 September 2026.
• RBI Governor Sanjay Malhotra unveiled UPI Tap and Pay (NFC-based, PIN-less for transactions below Rs 5,000) and MyUPI (powered by NPCI’s small language model FiMI).
• Union Minister Nitin Gadkari launched OneTag, jointly developed by IHMCL and NPCI, accessed through NHAI’s Rajmargyatra app.
• NPCI is a Section 8 (not-for-profit) company under the Companies Act 2013, incorporated in 2008 by RBI and IBA.
• IHMCL is NHAI-promoted; operates the National Electronic Toll Collection (NETC) programme.
• NHAI is constituted under the NHAI Act, 1988.

Prelims, the traps:

• NPCI is Section 8 (not-for-profit), NOT Section 25 (which is the pre-2013 Companies Act nomenclature); do not use the old section number.
• UPI is account-to-account; it does NOT use credit-card-style interchange fees. This distinguishes it from Visa/Mastercard networks.
• FASTag was made mandatory on national highways in February 2021, not 2019; earlier dates refer to phased rollout.
• RBI Governor Sanjay Malhotra took charge on 11 December 2024; do not confuse with his predecessor Shaktikanta Das.
• MyUPI’s FiMI is NPCI-built (in-house), NOT a licensed commercial model; the in-house design is a deliberate data-sovereignty choice.

Mains, arguments and keywords:

• DPI stack layering: identity (Aadhaar), payments (UPI), data (AA/Digilocker), land (Bhu-Aadhaar), each layer with its own institutional and legal spine.
• Portability as pro-competitive market design: MNP (2011) analogue for FASTag through OneTag.
• Zero-MDR sustainability question: cost of UPI at scale, PSP economics, subsidy trade-offs.
• AI in financial services: in-house model choice (FiMI) as data-sovereignty design.
• Keywords: NPCI, IHMCL, NETC, MDR, DPDP Act 2023, Section 8 company, RBI Payment and Settlement Systems Act 2007, FiMI.

Interview, be ready for:

• “Why has UPI transaction growth continued despite zero MDR?” Because the network externality of universal acceptance dominates the direct-cost calculus; merchants and users co-adopt at scale, and the fixed-cost economics of NPCI infrastructure absorb the marginal cost of a new transaction.
• “How is UPI Tap and Pay different from card tap-and-pay?” The user experience is similar; the underlying rails differ. Card tap-and-pay routes through the card network (with interchange to the issuing bank); UPI Tap and Pay routes account-to-account through NPCI’s UPI switch (with zero P2M MDR).
• “What is a small language model and why did NPCI build one?” A small language model is a compact, domain-trained transformer with parameter counts smaller than general-purpose LLMs; NPCI built FiMI in-house to keep training data local, keep model behaviour controlled and align with data-localisation obligations.
• “What does OneTag mean for the FASTag issuer market?” It reduces switching cost and re-introduces competitive pressure on FASTag-issuing banks, who had previously benefited from user inertia.

Sources: RBI, NPCI, IHMCL, PIB, GKToday

Source: UPI Tap and Pay, MyUPI and OneTag Unveiled at Global Fintech Fest 2026 — Ujiyari.com | Free UPSC & State PCS Current Affairs