In 2016, the National Payments Corporation of India launched a platform called the Unified Payments Interface. It was, at the time, a plumbing project — a set of APIs that allowed banks to talk to each other in real time. No consumer knew its name. No merchant asked for it. It was infrastructure built on the conviction that if you standardised the rails, the ecosystem would build the trains.
A decade later, UPI processes over 228 billion transactions a year. In December 2025 alone, the platform handled 21.6 billion transactions worth nearly ₹28 lakh crore. Over 500 million Indians use it. Nearly 700 banks are connected. It holds an 84.8 percent share of India's retail digital payments by volume. It operates in eight countries. It is, by any measure, the most successful digital public infrastructure project in the emerging world.
UPI did not achieve this by doing payments itself. It achieved this by creating a trust layer — a standardised, real-time, interoperable set of rails — on top of which private companies built products that hundreds of millions of people use every day. PhonePe, Google Pay, Paytm, CRED — none of these could exist without UPI. But UPI could not have reached 228 billion transactions without them.
India's healthcare system has now built its own version of those rails. It is called the National Health Claims Exchange. And it is sitting at almost exactly the same inflection point that UPI sat at in 2017 — technically operational, institutionally supported, and almost entirely unrealised.
What NHCX Actually Is
The National Health Claims Exchange was developed by the National Health Authority under the Ayushman Bharat Digital Mission, in collaboration with the Insurance Regulatory and Development Authority of India. It is one of three digital gateways under ABDM, designed to create a unified, FHIR-standard protocol for exchanging health insurance claims data between hospitals, insurers, and third-party administrators.
Before NHCX, the claims process in Indian health insurance was — and in most hospitals still is — fragmented, manual, and opaque. Every insurer had its own portal. Every TPA had its own format. Hospitals maintained separate teams to navigate separate systems for separate payers. A single hospital dealing with fifteen insurers might use fifteen different submission processes, each with its own document requirements, adjudication timelines, and communication channels. The result: delays, errors, rework, and a claim rejection rate that hovers around 20 percent.
NHCX replaces this fragmentation with a single set of APIs. A hospital submits a claim once, in a standardised FHIR format, through NHCX. The platform validates, routes, and tracks the claim through its lifecycle — from eligibility verification and pre-authorisation to final adjudication and settlement confirmation. Every step is digitally recorded, timestamped, and auditable.
The platform integrates with ABDM's core registries: ABHA for patient identity, the Health Facility Registry for hospital verification, and the Health Professional Registry for provider authentication. It uses ABDM's consent framework for purpose-limited, revocable data sharing. It produces a PaymentNotice — a digitally signed, machine-readable confirmation that an insurer owes a specific amount on a specific date — that is among the most authoritative commercial obligations any digital platform in India generates.
The NHA itself has drawn the UPI comparison explicitly. At the NHCX Innovation Meet at IIT Hyderabad on 6–7 March 2026, NHA CEO Dr. Sunil Kumar Barnwal described the long-term vision for NHCX as analogous to UPI — a platform where users trust the system because it works seamlessly and reliably, even if they do not know the institution running it.
The architecture is there. The ambition is there. What is missing is the second half of the UPI story.
Where NHCX Stands Today
As of mid-2025, more than 47 insurers and TPAs — representing nearly the entirety of India's retail health insurance market — had connected to the NHCX sandbox or live environment. The General Insurance Council confirmed that all health insurers are integrated. IRDAI has supported adoption through collaborative workshops and accelerator programmes rather than enforcement mandates, a deliberate strategic choice.
The insurer side, in other words, is largely in place.
The hospital side is not.
Tapan Singhel, MD and CEO of Bajaj General Insurance and chairman of the General Insurance Council, has stated publicly that slow hospital participation is the primary bottleneck preventing full realisation of NHCX's potential. Claim settlement on the exchange has begun with some insurers, but at small scale. The NHCX Innovation Meet itself was structured around this challenge: Day 2 of the event focused specifically on barriers and enablers for hospital participation.
This is where the UPI analogy becomes instructive — not as a metaphor, but as a diagnostic.
The UPI Lesson NHCX Has Not Yet Applied
UPI succeeded not because NPCI mandated adoption. It succeeded because it created conditions in which third parties had overwhelming economic incentive to build on top of the platform. PhonePe and Google Pay did not integrate with UPI out of regulatory compliance. They integrated because UPI gave them access to 500 million potential users through a single API. Merchants did not adopt QR codes because the government told them to. They adopted because customers showed up with phones and expected to pay.
The critical transition was from compliance-driven adoption to value-driven adoption. In UPI's early years, banks connected because NPCI and RBI expected them to. Usage was minimal. The inflection came when private applications built on top of UPI created direct financial value for end users — cashback, convenience, speed — that made UPI the obvious choice for every transaction. Once that happened, adoption became self-reinforcing. More users attracted more merchants. More merchants attracted more users. The flywheel did not need mandates to spin.
NHCX today is in the compliance phase. Insurers are connected because IRDAI has guided them to connect. Hospitals are offered incentives to participate. But for a hospital administrator running a 200-bed facility with fifteen insurer relationships and an overworked billing team, NHCX integration is another IT project, another compliance requirement, another system to learn — with no immediate, tangible financial return.
This is not a criticism of NHA or IRDAI. Both have built and supported the platform with remarkable speed. It is a structural observation: digital public infrastructure achieves scale not when participants are told to use it, but when participants cannot afford not to.
The Gap Between Data and Value
India's health insurance ecosystem processed over ₹1.17 lakh crore in premiums in FY 2024–25, covering more than 58 crore lives. Health insurance is now the single largest segment within non-life insurance, contributing over 41 percent of gross direct premiums. The data that moves through this ecosystem — claim submissions, adjudication decisions, payment confirmations — is enormous, standardised, and increasingly digital.
And yet, almost none of this data generates direct economic value for the hospitals that produce it.
When a hospital submits a claim and an insurer approves it, the resulting PaymentNotice is one of the most credible commercial obligations in India — government-registered, digitally signed, amount-confirmed, date-certain. But the hospital cannot use that confirmation for anything. It cannot show it to a bank. It cannot borrow against it. It cannot convert it into working capital. It sits in the system, technically confirmed, practically useless — until the insurer actually transfers the money, which can take 45 to 270 days.
The result: an estimated ₹38,000 crore in approved claims sits as dead working capital at any given time. Hospitals borrow against this trapped capital at 18 to 30 percent per annum from informal sources. IRDAI mandates settlement within 30 days with penal interest for delays. In practice, especially for smaller hospitals and government scheme claims, the gap persists.
This is the equivalent of UPI having built the entire payments infrastructure — real-time messaging, bank interoperability, standardised APIs — but not allowing anyone to actually move money through it. The rails exist. The value has not yet been unlocked.
What Made UPI Irreversible
The genius of UPI was not the technology. It was the economics.
NPCI built the rails. But the rails were open. Any licensed entity could build on top of them. And the moment private companies started building, they brought three things that public infrastructure alone could not: distribution, user experience, and economic incentive. PhonePe brought cashback. Google Pay brought simplicity. Paytm brought merchant networks. Each new participant made the platform more valuable for every other participant. The network effects compounded.
By the time UPI reached critical mass, it was no longer a government project. It was the national payments infrastructure — indispensable, irreversible, and self-improving. Banks that had initially connected out of compliance now depended on it for transaction volume. Merchants that had ignored QR codes now could not do business without them. The infrastructure had crossed from useful to essential.
Three structural features made this possible. First, open access — any regulated entity could build on the platform, creating competition that drove down costs and drove up quality. Second, standardisation — one API, one protocol, one format, regardless of which bank or app was involved. Third, and most critically, direct financial value for end users. A chaiwala in Varanasi did not adopt UPI because the RBI told him to. He adopted it because his customers stopped carrying cash.
NHCX has the first two. It has open, standardised APIs built on FHIR. It has a participant registry. It has a consent framework. What it does not yet have is the third: a reason for hospitals to care that is measured in rupees, not compliance.
The Question
When Dr. Barnwal compared NHCX's ambition to UPI at the Innovation Meet at IIT Hyderabad, he was articulating something precise. UPI did not just digitise payments. It created an entirely new layer of economic activity that did not exist before — lending on UPI, credit on UPI, insurance on UPI, investment on UPI. The payment rail became a financial rail.
NHCX has the same potential. The claims data that flows through the platform — verified identities, confirmed obligations, standardised adjudication trails, digitally signed payment confirmations — is raw material for an entire layer of financial activity that does not currently exist in Indian healthcare. But that layer will not build itself. It requires a deliberate decision to enable third parties to create value on top of the platform — just as UPI required a deliberate decision to let PhonePe and Google Pay exist.
India's health insurance market is ₹1.17 lakh crore and growing. Its hospitals are trapped in a working capital crisis that costs the system thousands of crores a year. Its claims infrastructure is digital, standardised, and government-verified. The rails are built.
The question is not whether NHCX can follow the UPI path. It is whether it will.