India is developing a framework that will allow AI agents to execute small digital payments without requiring approval for each individual transaction, according to three sources with direct knowledge of the proposal.
This could transform UPI into one of the world’s largest networks enabling agentic payments.
Although major payment firms have introduced similar systems in the U.S., Europe, Singapore and Australia, implementing such a framework on the widely used Unified Payments Interface would position India among the earliest nations to establish a national infrastructure for agentic AI payments.
According to a 2025 IMF report, UPI—run by the National Payments Corporation of India—ranks as the world’s largest fast retail payment system in terms of transaction volume.
In August, it handled 24.51 billion transactions totaling 29.82 trillion Indian rupees ($314.21 billion), with Google Pay and Walmart-owned PhonePe together representing roughly three-quarters of the monthly transaction volume.
The Unified Agent Protocol is expected to be announced next week at the Global Fintech Fest in Mumbai, according to sources who requested anonymity because the information is confidential.
The first source said that low-value, high-frequency purchases like groceries are expected to be among the earliest applications, noting that e-commerce platforms are well positioned to tap into initial demand.
Over time, NPCI anticipates that these use cases will grow more advanced, the source added. For instance, AI agents could automatically place orders based on promotional offers and discounts, and execute investments according to predefined price thresholds.
The protocol is anticipated to leverage two existing UPI features;
UPI Circle, which allows a primary account holder to assign payment authorization to a secondary user like an AI agent,
Reserve Pay, which enables customers to earmark funds for several future debits.
Banks currently cap such blocks at 10,000 rupees for up to 90 days, though this limit and its validity may be revisited for agentic use, the sources added
NPCI is likely to provide infrastructure that allows merchants to integrate directly, enabling customers to define rule-based instructions for AI agents on payment timing and amounts, with embedded spending caps, audit logs, and identity verification, according to the sources.
They further stated that the NPCI intends to establish a liability framework, though no specific details were disclosed.
GLOBAL PUSH
Global card networks Mastercard and Visa are independently developing comparable agentic payment capabilities in India, reflecting their broader worldwide effort to strengthen AI-powered commerce.
Mastercard carried out its first verified agentic transaction in New Delhi in June. Earlier this year, fintech company Pine Labs introduced its own agentic protocol, P3P, which enables AI agents to execute UPI payments following a one-time initial authorization.
