India clears a path for AI-powered electronic payments

India is preparing to give artificial intelligence a more direct role in everyday commerce. Under a proposed system, AI agents could make small electronic payments through the Unified Payments Interface, or UPI, according to limits and instructions set in advance by users.

The National Payments Corporation of India may announce a Unified Agent Protocol at the Global Fintech Festival in Mumbai next week. The protocol would give AI authority to make payments within a framework established by the account holder, rather than requiring approval for every transaction.

The initial focus is expected to be small, frequent purchases such as food, groceries and daily consumer goods. As the system develops, AI could choose discounts, place orders when prices reach a suitable level, or make certain investments when markets hit thresholds set by users. The plan would move AI beyond search and advice into decisions and payments in electronic commerce.

NPCI is expected to build the protocol using two existing UPI tools. UPI Circle lets an account holder authorize another entity to make payments, while Reserve Pay sets aside money for multiple transactions. Banks currently limit the reserved amount to 10,000 rupees, about $105, for up to 90 days, though those limits could change for AI-agent payments.

Customers would be able to define when, why and how much an AI could spend. The proposed safeguards include spending limits, identity checks, complete transaction records and a mechanism for assigning responsibility when errors or disputes arise. UPI processed 24.51 billion transactions worth 29.82 trillion rupees, or about $314.21 billion, in August 2026. Google Pay and PhonePe account for about three-quarters of transactions on the platform. Mastercard and Visa are also developing AI-agent payment solutions in India.