AI agents may soon be able to make UPI payments for users: How it may work, what will be allowed and what not

​NPCI may soon allow AI agents to make UPI payments on your behalf. A Reuters report citing three people familiar with the matter claims India is preparing a framework that would let artificial intelligence agents make small digital payments on UPI without approval for every transaction. The move could make UPI one of the world's largest networks built for agentic payments, and place India among the first countries with national infrastructure of this kind.​UPI is already the world's largest retail fast-payment system by transaction volume, according to a 2025 IMF. Data from NPCI suggest the network processed 24.51 billion transactions worth Rs 29.82 lakh crore in August, its highest monthly volume yet. Google Pay and PhonePe together account for roughly three-fourths of that volume.​What is Unified Agent ProtocolThe proposed Unified Agent Protocol (UAP) would create a common, interoperable system for registering, verifying and authorising AI agents that transact through UPI. The Reuters report claimed the protocol was expected to be unveiled at the Global Fintech Fest in Mumbai; however, NPCI has yet to confirm its announcement.​UPI was built around a human user approving each payment. Under the agentic model, a user would instead grant an AI agent defined authority such as a spending cap or restrictions on transaction type rather than confirming every purchase, according to the Economic Times.​How it may work and what will be allowedAccording to Reuters sources, the protocol is expected to draw on two existing UPI mechanisms: UPI Circle, which lets a primary account holder delegate payment authority to a secondary user, and Reserve Pay, which lets customers block funds for multiple debits. Banks currently cap such blocks at Rs 10,000 for up to 90 days, though sources told Reuters this limit may be revisited for agentic use.​Low-value, frequent purchases such as groceries are likely to be among the first use cases, with e-commerce platforms well placed to capture early demand, one source told Reuters. NPCI reportedly expects use cases to grow more sophisticated over time, with agents eventually placing orders around sale offers or making investments based on price thresholds.​Spending limits, audit trails and identity checks are expected to be built into the system, so that transactions can be verified as authorised and agents confirmed as legitimate. NPCI also reportedly plans to build in a liability framework, though details were not disclosed in the report​Industry is already movingSome groundwork exists outside NPCI's framework. Pine Labs has launched its own protocol, P3P, letting AI agents complete UPI payments after a single upfront authorisation. "The consumer authorises once, upfront. After that, the agent browses, selects, negotiates, and pays. No human authentication. No interruption. No friction," the company said. Gullak's gold-savings AI agent already uses P3P.​Mastercard completed its first authenticated agentic transaction in New Delhi in June, the report added, while Visa is separately building similar capabilities in India. Meanwhile, Razorpay has also launched an Agent Studio for merchants in March using Anthropic's Claude Agent SDK.​Agentic AI is listed as one of three core technology pillars at the Global Fintech Fest 2026, where discussions are expected to focus on establishing an agent's identity, defining its authority and maintaining audit trails as such payments enter India's financial infrastructure.​Get the latest technology news and updates. Download the TOI App.