UPI May Soon Let AI Agents Handle Payments on Your Behalf

India could soon allow AI agents to make small UPI payments for users without requiring approval for every transaction. According to a Reuters report, the National Payments Corporation of India (NPCI) is working on a proposed Unified Agent Protocol, which may be unveiled at the Global Fintech Fest in Mumbai next week.
Under the proposed system, users could give AI agents limited payment authority, including spending limits, permitted transaction types and specific conditions. For example, an AI agent could be instructed to buy weekly groceries within a ₹2,000 budget, compare prices, select products and complete the UPI payment automatically.
The system could build on existing mechanisms such as UPI Circle and Reserve Pay. NPCI may also provide infrastructure that merchants can integrate directly into their platforms.

AI Could Drive Agentic Commerce
The technology could initially focus on low-value, recurring payments such as grocery purchases. AI agents could search for products, compare prices, identify discounts, place orders and complete payments once predefined conditions are met.
The development comes as global payment companies explore AI-powered commerce. Mastercard and Visa are working on agentic payment capabilities in India, while Pine Labs has launched its P3P agentic protocol for AI-driven UPI payments.

Security and Liability Remain Key Concerns
The proposed framework is expected to include spending limits, identity verification, audit trails and liability rules. However, it remains unclear who would be responsible if an AI agent makes an incorrect payment or becomes involved in fraud.
UPI processed 24.51 billion transactions worth ₹29.82 lakh crore in August, highlighting the enormous scale of India’s digital payment network and the potential impact of AI-powered payments.