GFF: NPCI working to authorise AI agents on UPI

The National Payments Corporation of India (NPCI) is exploring the possibility of authorizing AI agents within the UPI ecosystem, aiming to integrate autonomous payments into India's largest retail fast-payment network. NPCI's non-executive chairman, Ajay Kumar Choudhary, emphasized that as AI agents transition from assisting users to acting on their behalf, the payments infrastructure must adapt to maintain interoperability, auditability, and settlement finality.

Choudhary's remarks follow a Reuters report that India is developing a framework enabling AI agents to execute small digital payments without user approval for every transaction, positioning UPI as one of the world's leading networks for agentic payments. This framework would expand on existing UPI capabilities like UPI Circle and Reserve Pay, which permit payment delegation and fund blocking for multiple debits, respectively.

NPCI plans to provide infrastructure for merchant integration, including spending limits, identity checks, and audit trails, alongside a liability mechanism to clarify responsibility among users, agents, banks, and merchants.

However, the primary challenge lies in ensuring that AI agents' flexibility does not compromise the certainty required in payment transactions. Choudhary proposed separating intent interpretation, authorization verification, and settlement finality, with AI handling intent and execution while a rule-based layer manages settlement.

This distinction is crucial as AI agents, tokenization, and payment systems converge, with AI providing intelligence and coordination, tokenization enabling transaction programmability, and payment rails ensuring secure final settlement.

The development of agentic payments on UPI also introduces new risks, such as model risk turning into payment or conduct risks. Choudhary stressed that risk management must oversee the entire process rather than treating each technology separately. With UPI handling 24.51 billion transactions worth Rs 29.82 lakh crore in August 2026, the integration of AI agents presents a significant challenge for India as it enters the second decade of this payment network.