India is preparing a payments framework that could allow artificial-intelligence agents to execute small UPI transactions without requiring the user to approve every individual payment. The proposed Unified Agent Protocol, or UAP, is expected to establish how an authorised software agent can transact within limits defined by the account holder, potentially extending UPI from a user-operated payments network into infrastructure for agent-led commerce.
The framework is likely to be unveiled at the Global Fintech Fest in Mumbai next week, although the National Payments Corporation of India has not formally confirmed the timeline or detailed specifications. The initiative is still under development, and several operational and liability provisions remain undisclosed. The September 1 report indicates that the first applications are expected to involve frequent, low-value purchases such as groceries.
UAP is expected to draw on two existing UPI capabilities. UPI Circle permits a primary account holder to delegate payment authority to another user, a mechanism that could be adapted to designate a verified AI agent. Reserve Pay allows a customer to block a specified amount of money for multiple future debits. Banks currently permit blocks of up to Rs 10,000 for as long as 90 days, but both the amount and validity period could be revised for agentic transactions.
Under the proposed model, customers would define instructions governing when an agent may make a payment, the amount it can spend and the merchants or categories it can use. The infrastructure is expected to incorporate spending ceilings, agent and customer identity checks, transaction audit trails and controls for merchants integrating directly with the protocol. NPCI is also preparing a liability framework, although it has not yet been disclosed how responsibility would be allocated among consumers, banks, payment applications, merchants and AI providers when an agent exceeds its authority or completes an erroneous transaction.
Early agent-led purchases could involve an AI system monitoring prices, offers or inventory before placing an order that satisfies a user-defined condition. More advanced applications could eventually include investment instructions tied to price thresholds, subject to financial-sector rules and the controls embedded in the protocol.
UPI processed a record 24.51 billion transactions worth Rs 29.82 trillion in August. Google Pay and PhonePe together handled approximately three-quarters of monthly transaction volume. Deployment of agentic functionality on infrastructure of this scale would move the technology beyond the proprietary payment frameworks being developed by individual platforms and card networks.
Visa and Mastercard are separately developing agentic-payment capabilities for India. Mastercard completed its first authenticated agent-led transaction in New Delhi in June, while Pine Labs has introduced P3P, a protocol that enables an AI agent to complete UPI payments following a single initial authorisation. The proposed NPCI protocol would create a common national layer across participating banks, merchants and payment applications rather than confining the capability to a single provider.
