NPCI readies framework for AI agents to make small UPI payments: Report

The Unified Agent Protocol is likely to be unveiled next week at the Global Fintech Fest in MumbaiIndia is preparing a framework that could allow AI agents to make small digital payments without requiring approval for every transaction, potentially making the Unified Payments Interface (UPI) one of the world’s largest networks for agentic payments, according to Reuters.The Unified Agent Protocol is likely to be unveiled next week at the Global Fintech Fest in Mumbai, people with knowledge of the matter said.The framework would place India among the first countries to establish national infrastructure for agentic AI payments.

Leading payment companies have already introduced similar frameworks in the US, Europe, Singapore and Australia.UPI, operated by the National Payments Corporation of India (NPCI), is the world’s largest retail fast-payment system by transaction volume, according to a 2025 IMF report.UPI processed 24.51 billion transactions worth ₹29.82 lakh crore ($314.21 billion) in August, with Google Pay and Walmart’s PhonePe accounting for around three-fourths of monthly transaction volumes.Early use casesLow-value, frequent purchases such as groceries are expected to be among the first use cases, with e-commerce platforms seen as well positioned to capture early demand, one of the sources said.Over time, the use cases could become more sophisticated.

AI agents could, for example, place orders based on sale offers and discounts or make investments based on specified price thresholds, the source said.The protocol is expected to build on two existing UPI mechanisms — UPI Circle, which allows a primary account holder to delegate payment authority to a secondary user such as an AI agent, and Reserve Pay, which allows customers to block funds for multiple debits.Banks currently cap such blocks at ₹10,000 rupees ($105.44) for up to 90 days.

The sources said these limits and validity periods could be revisited for agentic payments.NPCI is expected to provide infrastructure allowing merchants to integrate directly, enabling customers to set rule-based instructions for AI agents on when and how much to pay.

The system is also expected to include spending limits, audit trails and identity checks.The NPCI plans to establish a liability framework as well, although the sources did not provide further details.Global push for agentic paymentsMastercard and Visa are separately developing similar agentic payment capabilities for India as payment networks globally move to support AI-driven commerce.Mastercard completed its first authenticated agentic transaction in New Delhi in June.Earlier this year, fintech firm Pine Labs launched its own agentic protocol, P3P, allowing AI agents to complete UPI payments after a single upfront authorisation.