India is developing a system that could allow artificial intelligence agents to make small digital payments on behalf of consumers, potentially placing the emerging economy at the forefront of AI-powered commerce.
AI enters India’s payment network
The proposed Unified Agent Protocol would operate through India’s Unified Payments Interface, commonly known as UPI. The system could be presented at the Global Fintech Fest in Mumbai next week, according to sources familiar with the development.
AI agents would initially be expected to handle frequent, low-value purchases such as groceries. Instead of approving every transaction separately, customers could establish rules governing what the agent may buy, when payments can be made and how much can be spent.
The system is expected to include spending limits, identity checks, audit trails and controls determining which merchants can receive payments. A liability framework is also reportedly being considered.
A vast testing ground
UPI is already the world’s largest retail fast-payment system by transaction volume. It processed 24.51 billion transactions worth 29.82 trillion rupees, or approximately $314 billion, during August.
This scale could make India one of the first countries to introduce agentic payments across national digital infrastructure rather than through a limited private platform.
The protocol could use existing UPI functions that allow account holders to delegate payment authority and reserve funds for future transactions. Banks currently limit certain reserved amounts to 10,000 rupees for periods of up to 90 days, although these rules may be revised.
Global competition intensifies
Mastercard, Visa and Indian fintech company Pine Labs are also developing systems that allow AI agents to complete payments. Mastercard conducted an authenticated agentic transaction in New Delhi in June.
India’s initiative could create new opportunities for banks, retailers and technology companies. However, widespread adoption will depend on consumer trust, fraud protection and clear responsibility when an autonomous agent makes an incorrect or unauthorised purchase.
Newshub Editorial in Asia – 2 September 2026
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