Imagine telling an AI agent to buy your weekly groceries and having it complete the UPI payment itself without asking you to approve the transaction each time.
That is the kind of system the government is preparing, reported news agency Reuters citing three people familiar with the matter. The proposed framework could allow AI agents to make low-value digital payments on behalf of users, subject to rules and spending limits set in advance.
The framework, expected to be developed by the National Payments Corporation of India (NPCI), could give UPI a new role in the emerging world of agentic AI, where software does not just provide information or recommendations but can take actions on a user’s behalf.
The Unified Agent Protocol could be unveiled next week at the Global Fintech Fest in Mumbai, according to the report. NPCI did not immediately respond to Reuters’ queries seeking comment.
The proposed system would allow users to give an AI agent limited authority to make payments rather than requiring approval for every transaction.
Users could set rules governing when an agent can pay, how much it can spend and potentially what type of transaction it can make.
For instance, an AI agent could be instructed to purchase groceries within a fixed budget. Once the conditions are met, the agent could complete the payment without requiring the user to manually authorise that particular transaction.
The proposed infrastructure is expected to include spending limits, identity checks and audit trails, according to Reuters.
NPCI is also expected to provide infrastructure that merchants can integrate directly.
Low-value and frequent purchases such as groceries could be among the earliest applications for the system.
E-commerce platforms could also become early adopters as AI agents begin to participate more actively in online shopping.
The use cases could eventually extend beyond routine purchases.
According to the report, AI agents could identify sale offers and discounts, place orders based on user instructions and potentially make investments when specified price thresholds are met.
That would represent a shift from AI helping users decide what to buy to AI actually completing the transaction.
The proposed framework is expected to build on two existing UPI mechanisms — UPI Circle and Reserve Pay.
UPI Circle allows a primary account holder to delegate payment authority to another user. The proposed agentic system could use a similar mechanism to give an AI agent limited payment authority.
Reserve Pay allows customers to block funds for multiple debits.
Banks currently allow such blocks of up to Rs 10,000 for a maximum of 90 days. According to the Reuters report, both the amount and validity period could be reconsidered for agentic payments.
The objective would be to allow AI agents to transact while keeping their access and spending within limits defined by the customer.
The proposed framework could have a significant impact because of the sheer scale of UPI.
UPI processed 24.51 billion transactions worth Rs 29.82 trillion in August, according to figures cited in the Reuters report. Google Pay and Walmart-owned PhonePe accounted for around three-fourths of monthly transaction volumes.
If AI agents are allowed to transact on UPI, the technology would effectively gain access to one of the world’s largest retail digital-payment networks.
For consumers, that could eventually mean delegating increasingly routine financial tasks to AI instead of manually completing each transaction.
The move comes amid a broader push by global payment companies to prepare for AI-driven commerce.
Mastercard and Visa are separately developing agentic-payment capabilities in India.
Mastercard completed its first authenticated agentic transaction in New Delhi in June.
Fintech company Pine Labs also launched its P3P agentic protocol earlier this year, allowing AI agents to complete UPI payments after a single upfront authorisation.
The proposed NPCI framework could take the concept to the national payments infrastructure level.
Giving an AI agent the ability to move money raises a different set of questions from conventional digital payments.
The proposed system is expected to have spending limits, identity checks and audit trails. NPCI also plans to build a liability framework, according to the Reuters report, although details of how liability would be assigned were not available.
That could become particularly important if an AI agent makes a payment incorrectly, exceeds its intended instructions or is manipulated into making an unauthorised transaction.
For now, the framework is still being prepared. More details are expected if NPCI unveils the Unified Agent Protocol at the Global Fintech Fest.
The larger change, however, is clear: UPI could move from a system where a person initiates and approves payments to one where users can give AI agents limited authority to transact on their behalf.