InstiFi aims to onboard at least 500 online merchants, with a focus on SMBs. Prakash Ravindran, CEO & Director, InstiFi speaks exclusively to Rajneesh De, Group Editor, CXO Media & APAC Media, on how the company is expanding its online merchant base and driving consistent transaction volumes with UPI transactions surging rapidly.
India’s digital payments ecosystem is evolving rapidly. What key trends do you believe will define the next phase of fintech growth?
The UPI-led dominance is expected to deepen, evolving from payments to a full-stack financial layer. UPI’s share in total digital transactions has increased to ~80% between 2021 and 2025. As of February 2026, UPI transactions surged 27% annually to 20.39 billion. This scale will support credit, insurance, and wealth products embedded within payment journeys. Moreover, credit on UPI and embedded finance will accelerate. Innovations such as pre-approved credit lines on UPI are transforming it into a real-time lending rail, particularly for underserved segments and MSMEs.
Additionally, AI-led payments and automation will gain traction. Fintech brands integrating AI with payments indicate a shift toward conversational commerce and autonomous transactions, improving user experience and transaction efficiency. Merchant digitisation and offline penetration are expected to continue to expand. UPI QR deployments have grown to ~65 crore, enabling deeper adoption across small businesses and rural markets.
UPI has transformed the payments landscape. Where do you see the next wave of innovation emerging within India’s payment infrastructure?
The next wave of innovation is expected to focus on deepening functionality, expanding use cases, and strengthening infrastructure resilience. A key area is credit enablement on payment rails. The integration of pre-approved credit lines with UPI is expected to scale rapidly, effectively turning it into a real-time micro-credit delivery system. This could unlock formal credit access for millions of users and MSMEs who remain underserved by traditional banking channels.
Offline and low-connectivity payments will see significant advancement. Solutions leveraging NFC, sound-based technology, and stored-value mechanisms will drive adoption in rural and semi-urban markets. The expansion of UPI AutoPay and mandate-based systems will enable subscription models, utility payments, and B2B transactions to move seamlessly onto real-time rails, improving cash flow predictability for businesses. Conversational interfaces, predictive payment reminders, and automated financial actions will make transactions more intuitive and embedded within daily digital journeys.
Trust remains central to digital finance. What measures should fintech platforms prioritize to strengthen merchant and consumer confidence?
Robust security architecture is critical. Platforms must deploy multi-factor authentication, real-time fraud detection, and AI-driven risk monitoring to safeguard transactions at scale. Compliance with guidelines from the Reserve Bank of India and frameworks set by the National Payments Corporation of India is essential.
Data privacy and consent management must be strengthened. Clear user control over data sharing, aligned with India’s digital data protection regulations, builds long-term confidence. Dispute resolution and customer support need to be fast and transparent. Instant acknowledgement, defined turnaround times, and seamless grievance redressal improve trust. System reliability and uptime must be ensured, especially as transaction volumes exceed billions monthly. Consistent performance reinforces confidence across both consumers and merchants.
As fraud and cyber risks grow more sophisticated, how should fintech companies approach risk management while ensuring a seamless user experience?
Fintech companies need to embed security into the user journey rather than layering it on top. This requires a shift toward intelligence-led, adaptive risk management. AI and machine learning play an important role by analyzing transaction behaviour in real time and enabling risk-based authentication. Low-risk transactions can proceed with minimal friction, while high-risk activities trigger additional verification. Continuous authentication through device fingerprinting, biometrics, and behavioural signals strengthens protection without interrupting users.
Ecosystem-level collaboration is equally important. Alignment with regulatory and network frameworks from the Reserve Bank of India and National Payments Corporation of India allows faster detection and response to emerging threats. At the same time, practices such as tokenisation and data minimisation reduce exposure to sensitive information. Transparent communication, including real-time alerts and user controls, ensures that security measures build trust while preserving a smooth and intuitive payment experience.
SMBs are driving digital payment adoption, what are the biggest challenges they face today, and how can fintech players better support their growth?
Small and medium businesses (SMBs) are central to digital payment growth, yet structural and operational constraints continue to limit scale. Cash still accounts for 50% of transactions in India’s retail ecosystem, reflecting persistent trust and habit barriers. Cost sensitivity remains high, with merchant discount rate-related concerns and hardware investments impacting margins, particularly for micro-merchants. Intermittent connectivity and low digital literacy further constrain adoption in Tier 2+ markets. Additionally, rising fraud incidents like UPI fraud cases undermine confidence.
Fintech players can unlock SMB growth through targeted interventions. Zero- or low-cost acceptance infrastructure (QR-based, SoftPOS) reduces entry barriers, while embedded finance solutions such as instant credit, invoice financing, and cash flow analytics address liquidity gaps. AI-led fraud detection and vernacular-first interfaces can enhance trust and usability. Integrating payments with GST, inventory, and accounting systems enables SMBs to transition from mere acceptance to full-stack digital businesses, improving efficiency and formalisation.
In an increasingly automated ecosystem, what is the continued relevance of human-led support in delivering strong customer experiences?
Human-led support remains critical to delivering strong customer experiences, particularly in digital payments. While automation enhances speed and efficiency, complex issues, fraud concerns, and onboarding challenges require contextual understanding and real-time judgment that only human intervention can provide. We prioritize human-to-human support over bots, enabling faster resolution and building merchant trust. This approach is especially valuable for SMBs and underserved segments, where personalized guidance improves adoption and retention. Combining automation with human expertise ensures both operational efficiency and deeper customer confidence in digital financial systems.
As a payment aggregator, what are the services and solutions available in the InstiFI portfolio?
We offer a comprehensive portfolio of digital payment services designed to enable seamless, secure, and scalable transactions for businesses. Its solutions include credit and debit card processing, Unified Payments Interface (UPI) payments, net banking, and virtual accounts, allowing merchants to accept payments across multiple channels.
The platform supports API-driven integrations for quick merchant onboarding, real-time transaction processing, and smooth connectivity with banks and financial institutions. It also provides end-to-end integration support, including mobile APKs and dedicated UAT environments. InstiFi strengthens its offering with robust risk management, real-time transaction monitoring, AML systems, and compliance integrations, ensuring secure and reliable payment operations for businesses across India.
What are InstiFi’s unique competitive differentiators over other payment aggregators?
InstiFi differentiates itself through a combination of regulatory positioning, technology depth, and service-led execution. As a Goa-based RBI-authorised payment aggregator, we bring regional uniqueness while operating at a national scale.
Our API-first architecture enables faster merchant onboarding and seamless integration with banks and financial institutions, ensuring high reliability and scalability. A strong compliance framework, supported by real-time risk monitoring, AML systems, transaction screening, and integrations such as CKYC, improves trust and operational transparency. A key differentiator is our human-led support model, offering direct, personalized assistance rather than bot-driven interactions.
What are the key pillars of InstiFI’s GTM strategy?
InstiFi’s go-to-market strategy is anchored in four key pillars. First, a focused SMB approach targets both urban and underserved markets, addressing gaps in digital payment adoption. Second, seamless onboarding through API-driven integrations, mobile APKs, and UAT environments reduces entry barriers for merchants. Third, a strong compliance-led positioning that builds credibility and trust. Fourth, a human-led support model enhances merchant experience and retention. Supported by recent capital infusion, the company is scaling nationwide, with a clear focus on expanding its online merchant base and driving consistent transaction volumes.
Looking ahead, what strategic priorities will shape InstiFi’s growth, and how do you see the company contributing to India’s broader fintech vision?
InstiFi aims to onboard at least 500 online merchants, with a focus on SMBs. Its growth will be shaped by expanding its merchant base, particularly among SMBs, while strengthening its nationwide presence as a full-stack payment aggregator. The company will continue to invest in innovative payment technologies that address evolving customer needs.
InstiFi aims to be perceived as a “Aggregator of Trust” while delivering human-focused digital payment experiences that empower India’s digital economy.
