India's National Payments Corporation (NPCI) is preparing to enable AI-driven agents to perform low-value digital payments on the Unified Payments Interface (UPI) without requiring human approval for every transaction. According to three people familiar with the matter cited by Reuters, the system — called the Unified Agent Protocol — is expected to be unveiled next week at the Mumbai Global Fintech Fest.
What the protocol does
The Unified Agent Protocol would let third-party AI agents make payments on behalf of users according to predefined rules. The planned design would allow merchants to integrate directly with the system and let customers set rule-based instructions about when and how much their agents may pay. The framework is intended to include built-in spending limits, audit logs and identity verification; NPCI also plans to establish a liability framework, although its details have not been disclosed.
Early use cases
Sources say the initial applications will focus on low-value, frequent purchases — for example everyday grocery items — where automation provides convenience. E-commerce platforms are seen as particularly well positioned to serve early demand. Over time, more complex capabilities are envisaged: agents could place orders based on promotions and discounts or make investment decisions tied to specific price thresholds.
Built on existing UPI mechanisms
The protocol would likely build on two existing UPI features. One is UPI Circle, which allows an account holder to delegate payment authority to a secondary user — in this case, an AI agent. The other is Reserve Pay, where a customer can pre-lock funds for multiple successive debits. Banks currently cap such locks at 10,000 rupees (about $105) for up to 90 days; those limits could be reviewed for agent-based usage.
Scale and context
According to the International Monetary Fund's 2025 report, UPI is the world's largest retail instant payment system by transaction count. In August 2025 UPI processed 24.51 billion transactions worth about $314 billion, with Google Pay and PhonePe (owned by Walmart) accounting for three-quarters of the volume.
Competition and global players
India is not alone in exploring agent-based payments. Mastercard and Visa are developing their own agentic payment solutions for the Indian market as part of broader AI commerce strategies; Mastercard conducted its first authenticated agent transaction in New Delhi in June.
Why this matters
If implemented, the Unified Agent Protocol would make UPI among the first national-scale infrastructures to support agent-based AI payments, unlocking automation opportunities across retail, e-commerce and financial services. It also raises regulatory, privacy and liability questions tied to automated money flows and the allocation of responsibility.
Sources and note
The reporting is based on Reuters accounts citing three people familiar with the matter. An AI assistant contributed to preparing this article; the final text was edited and verified by our journalist.
