The Story
The National Payments Corporation of India is preparing a framework that would let AI agents make small payments on a user's behalf without seeking approval for each transaction, according to people familiar with the work.
The standard is called the Unified Agent Protocol and is expected to be unveiled at the Global Fintech Fest in Mumbai, which runs from 9 to 11 September at the Jio World Centre. Agentic AI is among the event's stated themes. NPCI declined to comment.
The protocol would build on two existing UPI mechanisms rather than a new network. UPI Circle lets a primary account holder delegate payment authority to a secondary user, a structure originally intended for family members and trusted individuals, and could be extended to treat an AI agent as that secondary party. Reserve Pay lets customers block funds once for multiple future debits. Banks currently cap such blocks at ₹10,000 for up to 90 days, and both the limit and the validity period may be revisited for agentic use.
Initial use cases are expected to be low-value and high-frequency: grocery orders and routine digital purchases. NPCI anticipates more sophisticated applications later, including agents placing orders in response to discounts, or making investments when specified price thresholds are met. The organisation is expected to provide infrastructure allowing merchants to integrate directly.
Separately, NPCI is reported to be announcing interoperability for UPI AutoPay, which would let users move existing mandates between apps and merchants.
The groundwork has been laid over the past year. At the 2025 edition of the same event, NPCI worked with Razorpay and OpenAI on agentic payments through ChatGPT, supported by Axis Bank and Airtel Payments Bank and built on the same two mechanisms.
Why It Matters
UPI's trust architecture was designed to answer one question: is this person who they claim to be. Agentic payments introduce a second, and the two are not the same problem.
The system must now establish whether an agent is authorised to act for a user, and whether it is the agent it claims to be. Device binding and a PIN do not settle that. A human at a screen was the final check before money moved, and removing it means the rules have to carry weight a person previously carried.
Which is why the choice to build on UPI Circle is worth examining closely. Circle exists so that a parent can let a child pay, or a household can share access to an account. It assumes the secondary party is a person who can be warned, reasoned with, and held responsible for a mistake. An agent is none of those things. Treating software as a delegated human is an elegant reuse of existing plumbing, and it inherits a permission model built around a kind of accountability software cannot bear.
The number that will matter most is the ₹10,000 block cap under Reserve Pay. That limit is the containment. Every other question about consent, authentication and liability sits downstream of where it is finally set.
The Strategic Read
There is a tension here with UPI's own economics that has not been discussed.
UPI processed 24.51 billion transactions worth ₹29.82 lakh crore in August. Volume rose 3.6 per cent from July while value fell slightly, which means the average payment shrank to about ₹1,217 from ₹1,263. The system is growing by adding smaller and smaller payments.
That is the source of the industry's revenue problem. Person-to-merchant UPI carries no merchant discount rate, and the legislation now in progress would permit one only on transactions above ₹2,000, which are roughly 4 per cent of person-to-merchant volume. Running the ecosystem is estimated to cost around ₹20,000 crore a year.
Agentic payments target precisely the segment that generates no revenue. Groceries and routine purchases sit well below ₹2,000, and automation increases frequency by design. An agent reordering weekly produces more transactions of smaller value than a person shopping monthly. The framework would therefore expand the volume the ecosystem cannot charge for, at the moment the industry is trying to establish that it can charge for anything at all.
For fintech founders the strategic read is clearer. By building the agent layer into national infrastructure, NPCI ensures that nobody owns agentic checkout. Payment companies reportedly abandoned plans for competing protocols and chose to work with NPCI's instead, which suggests they reached the same conclusion. Anyone whose plan involved becoming the gateway between AI shopping agents and Indian payments now has a public rail to plug into rather than a position to defend.
The unresolved question is fraud. India already contends with substantial UPI fraud built around persuading people to authorise payments they should not. Removing per-transaction approval eliminates the last human checkpoint in that chain. Whatever replaces it must work through rules, spending limits and agent authentication, and none of that design is public yet. The protocol will be judged on that, not on the demonstrations at a conference.
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