India Prepares for AI-Driven UPI Payments
India is preparing a framework that could allow AI agents to make small digital payments through UPI without requiring users to approve every transaction, according to sources familiar with the matter. The Unified Agent Protocol could be unveiled next week at the Global Fintech Fest in Mumbai, potentially making India one of the first countries to introduce national infrastructure for agentic AI payments.
Early applications are expected to focus on frequent, low-value purchases such as groceries and e-commerce transactions. AI agents could eventually go beyond routine purchases by placing orders when discounts are available or making investments based on user-defined price limits. The proposed system is expected to build on existing UPI mechanisms such as UPI Circle and Reserve Pay, with spending limits, identity checks and audit trails.
The move comes as global payment companies including Mastercard and Visa develop similar AI-powered payment capabilities in India and other markets. NPCI is expected to provide infrastructure that allows merchants to integrate directly with the system while also establishing rules around spending and liability. The development could further expand UPI’s role in India’s rapidly growing digital payments ecosystem.
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