India’s fintech ecosystem has spent the last decade breaking records. From the ubiquity of UPI to the explosion of digital wallets, the narrative has been dominated by velocity and volume. However, as the sector matures, the definition of success is shifting. The upcoming Union Budget 2026 arrives at a moment where the industry is looking to consolidate these gains rather than just chase new adoption milestones. The focus is pivoting from “how many” to “how secure” and “how deep.”
Industry observers note that while market penetration is high, the infrastructure supporting it needs to be bulletproof. The next phase of growth requires robust regulatory guardrails that prioritize compliance without stifling innovation. This is particularly critical for MSMEs, for whom digital payments are often the first step toward formal credit access. Furthermore, as Indian businesses look outward, the complexities of cross-border payments remain a friction point that policy needs to smooth out. The integration of AI for fraud detection is no longer a luxury but a necessity to maintain user trust in an increasingly cashless economy.
Kunal Jhunjhunwala, Founder and CEO of AirPay, articulates this strategic transition. He argues that the government’s policy framework must now focus on resilience and interoperability to ensure that the digital economy is not just vast, but also durable and globally competitive. “As India enters Budget 2026, fintech and digital payments must move beyond prioritizing scale to focus on resilience, compliance, and the depth of adoption.
The policies in place will not only determine the growth trajectory of the next phase but also influence the digital infrastructures that will be built under regulation, as well as the compliance facilitation and interoperability among the various payment channels that will be established. While MSMEs will be able to utilize support from policies on onboarding, payment-linking to credit, and last-mile digitization to speed up formalization and reap the consequent productivity benefits in these sectors, more regulatory clarity on cross-border payments will be crucial in making Indian firms engaged in international trade more.
The government should also push for the adoption of cutting-edge technologies, such as AI-based risk management and fraud detection, to build trust, resilience, and productivity across India’s financial ecosystem, thereby securing sustainable growth in the upcoming phase of the digital economy.”
