India May Soon Let AI Agents Make UPI Payments Without Manual Approval Each Time
India's digital payments system, which has moved from PINs and OTPs to fingerprint and facial authentication, could be headed toward a new phase - hands-free transactions where AI agents recognise users, evaluate purchases and complete payments with little to no manual intervention. According to a Reuters report, the government may soon permit AI agents to process small UPI transactions without…
India's digital payments ecosystem, which has transitioned from PINs and OTPs to biometric authentication, may soon evolve into hands-free transactions powered by artificial intelligence agents. According to a Reuters report, the government could permit AI agents to process small Unified Payments Interface (UPI) transactions without requiring manual approval for each payment.
The proposed framework, called the Unified Agent Protocol, might be unveiled at the upcoming Global Fintech Fest in Mumbai. The National Payments Corporation of India (NPCI) has not yet officially confirmed the proposal. If implemented, the protocol would enable users to grant AI agents restricted payment authority based on predefined conditions, replacing the need to approve each transaction individually.
Initially, the focus would be on small, frequent purchases like groceries, with e-commerce platforms likely to adopt the technology first. Over time, AI agents could potentially handle more complex transactions, such as spotting deals and discounts and placing orders automatically based on user instructions. The framework would build upon existing UPI tools like UPI Circle and Reserve Pay, allowing users to define rules around spending limits and specifying circumstances under which an AI agent can make payments.
Safeguards such as spending limits, identity verification checks, and audit trails for tracking transactions are under consideration. NPCI is also developing a liability framework to determine accountability in case of issues. While AI agents would have significant capabilities, users would retain control over the rules governing an agent's actions.
India is not alone in exploring agentic commerce; Mastercard and Visa are also developing similar infrastructure to enable AI agents to transact while maintaining controls around trust, security, and visibility. As the Unified Agent Protocol remains a proposed framework, its final details will depend on NPCI's official announcement.
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