India’s National Payments Corporation (NPCI) is preparing to launch UPI 3.0, a transformative upgrade that will allow smart devices such as TVs, fridges, and cars to make automated payments without human intervention. Expected to be announced at the Global Fintech Fest in October 2025, this innovation leverages IoT, Autopay, and UPI Circle, promising seamless transactions but also introducing new challenges around security and user consent.

UPI 3.0: The Next Leap in Automated Payments

Smart Devices Set to Join the Payments Revolution

UPI 3.0 is poised to revolutionize digital payments in India by enabling Internet of Things (IoT)-connected devices to initiate and complete transactions autonomously. This means that everyday appliances—smart TVs, refrigerators, washing machines, and even cars—will soon be able to pay for services, subscriptions, and routine purchases without requiring the user to manually approve each transaction.

The system builds on existing features like Autopay and introduces UPI Circle, allowing secondary UPI IDs to be linked to a primary account. For example, a smart fridge could automatically reorder groceries when supplies run low, or a car could pay for tolls and fuel without driver intervention.

Key Features and Innovations

Autopay & UPI Circle: Devices can use secondary UPI IDs for recurring or background payments, streamlining processes like monthly subscriptions or utility bills.
IoT Integration: Payments can be initiated by any connected device, not just smartphones, expanding the reach and convenience of UPI.
Offline Payments: UPI 3.0 supports transactions even in areas with poor connectivity, making digital payments more inclusive.
Enhanced Security: New measures such as tokenization, biometric authentication (facial recognition, fingerprint), and secure QR codes are being implemented to reduce fraud and unauthorized access.
User Control: UPI Circle allows users to set permissions and spending limits for each device, helping manage family or shared finances.

UPI 2.0 vs. UPI 3.0

Feature	UPI 2.0	UPI 3.0 (2025)
Device Payments	Smartphones only	IoT devices (TVs, fridges, cars)
Autopay	Limited	Advanced, device-level
Offline Payments	No	Yes
Security	PIN, OTP	Biometric, tokenization
User Controls	Basic	Device-specific, UPI Circle
Transaction Limits	Lower	Higher

Opportunities and Challenges

Opportunities:
- Convenience: Automated payments reduce friction for routine expenses.
- Financial Inclusion: Offline and device-based payments can reach underserved populations.
- Business Growth: Merchants and service providers can offer seamless, recurring services.
Challenges:
- Security Risks: Automated, device-initiated payments heighten concerns about unauthorized transactions and data breaches.
- User Consent: Ensuring users retain control and transparency over device spending is critical.
- Regulatory Oversight: The NPCI and regulators are working to establish safeguards before the official rollout.

Industry and Consumer Impact

With over 185 billion UPI transactions processed last year, the integration of IoT with UPI 3.0 is expected to further accelerate digital adoption and set a global precedent for smart payments. The move aligns with India’s vision for smarter cities and a cashless economy, but it also demands robust frameworks for privacy and fraud prevention.

Frequently Asked Questions

How will users set spending limits for their devices?
Users will be able to configure device-specific limits and permissions via their banking or UPI app settings.

What happens if a device is lost or stolen?
Users can remotely disable device-linked UPI IDs, preventing unauthorized payments.

Will UPI 3.0 work with international merchants?
Initial rollout will focus on domestic payments, with cross-border features expected in future updates.

Can businesses use UPI 3.0 for automated supply chain payments?
Yes, businesses can automate recurring payments for inventory, utilities, or services using IoT-enabled devices.

Will there be extra charges for automated device payments?
Transaction fees are expected to remain low, in line with UPI’s current policy of minimal or zero charges for most users.

Key Takeaways

UPI 3.0’s integration of IoT and automated payments marks a bold step toward a frictionless, cashless future in India. As smart devices begin to handle routine transactions, users and businesses will benefit from unprecedented convenience—but must also stay vigilant about security and data privacy. The coming months will reveal how regulators, consumers, and the industry adapt to this new era of intelligent payments.