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India could soon allow AI agents to make small UPI payments without requiring users to approve every transaction individually. The proposed system would allow people to grant AI agents limited payment authority based on preset instructions, according to a Reuters report.
The proposed framework, called the Unified Agent Protocol, could be unveiled at the Global Fintech Fest in Mumbai next week, sources told Reuters. The proposal is not formally confirmed by the National Payments Corporation of India (NPCI).
If introduced in the reported form, the framework would allow users to set rules for AI agents, including how much they can spend and when they can make payments.
The initial use cases are expected to involve small, frequent transactions, such as grocery purchases. E-commerce platforms could also become early areas for agent-led payments.
Reuters reported that AI agents could identify offers and discounts and place orders based on user instructions. More advanced applications could eventually include investments based on specific price thresholds, although such uses would depend on the final framework and regulations.
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The proposed system could use existing UPI mechanisms such as UPI Circle, which allows payment authority to be delegated, and Reserve Pay, which enables funds to be set aside for specified payments.
NPCI is also expected to provide infrastructure allowing merchants to integrate with the system. The reported safeguards under consideration include spending limits, identity checks, and audit trails.
NPCI also plans to establish a liability framework, although details were not available.
The model would therefore not give AI agents complete control over a user's payments. Instead, users could provide pre-authorized, rule-based payment authority within limits set by the system.
India is not alone in exploring AI-led payments. Mastercard developed Agent Pay, an infrastructure that enables AI agents to process payments while maintaining controls over trust, security, and transaction visibility. Visa is also developing infrastructure for agent-led commerce.
In India, Mastercard has already enabled agentic commerce transactions with businesses, while fintech companies, including Pine Labs, are developing infrastructure for AI-led payments.
For now, the Unified Agent Protocol remains a proposed development. Its final features, transaction limits, safeguards, liability rules, and rollout timeline will depend on what NPCI formally announces.
