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India Readies Framework for AI Agent Payments on UPI
India is preparing a framework to let AI agents make small digital payments on UPI without per-transaction approval, according to three sources familiar with the matter. The proposed Unified Agent Protocol could be unveiled next week at the Global Fintech Fest in Mumbai, though NPCI has not formally confirmed the plan.
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India Prepares Framework for AI-Led Payments on UPI
India is preparing a framework that would allow artificial intelligence agents to make small digital payments on the Unified Payments Interface (UPI) without requiring approval for every transaction, according to three sources familiar with the matter. The move could make UPI one of the world's largest networks supporting agentic payments.
The proposed framework, called the Unified Agent Protocol, is likely to be unveiled next week at the Global Fintech Fest in Mumbai, the sources said, requesting anonymity as the details are private. The National Payments Corporation of India (NPCI), which operates UPI, did not immediately respond to queries from Reuters seeking comment. The proposal has not been formally confirmed by NPCI.
UPI is the world's largest retail fast-payment system by transaction volume, according to a 2025 IMF report. In August, it processed 24.51 billion transactions worth ₹29.82 lakh crore, with Google Pay and Walmart's PhonePe accounting for around three-fourths of monthly transaction volumes.
Early Use Cases and Mechanisms
Low-value, frequent purchases such as groceries are likely to be among the first use cases, according to one of the sources. E-commerce platforms are well-placed to capture early demand. The sources said NPCI expects use cases to eventually become more sophisticated, with AI agents potentially able to place orders based on sale offers and discounts and make investments based on specified price thresholds.
The protocol is expected to draw on two existing UPI mechanisms: UPI Circle, which lets a primary account holder delegate payment authority to a secondary user such as an AI agent, and Reserve Pay, which lets customers block funds for multiple debits. Banks currently cap such blocks at ₹10,000 for up to 90 days, though this limit and its validity may be revisited for agentic use, the sources added.
Safeguards and Infrastructure
NPCI is expected to provide infrastructure allowing merchants to integrate with the system, letting customers set rules covering how much an AI agent can spend and when it can make a payment. Spending limits, identity checks, and audit trails are among the safeguards being considered, according to reports. The NPCI also plans to establish a liability framework, although details were not available.
Global Context and Private Sector Efforts
India's effort is part of a broader global push toward agent-led commerce. Mastercard has developed Agent Pay, an infrastructure for AI agents to conduct payments, and has already conducted agentic commerce transactions with businesses in India. Visa has been developing infrastructure for agent-led commerce as well. In India, Mastercard completed its first authenticated agentic transaction in New Delhi in June. Fintech companies including Pine Labs have been developing infrastructure for AI-led payments; Pine Labs launched its own agentic protocol, P3P, which lets AI agents complete UPI payments after a single upfront authorisation.
The framework remains a proposed development, with final features depending on NPCI's formal announcement.
How each outlet told it
A framing line is our reading of that outlet's own text — an interpretation, not a quotation and not a fact we assert. Check it against what the outlet published.
Framing: Highlights the potential for AI agents to make small UPI payments without per-transaction approval, emphasizing the novelty and possibility — neutral and informative
Facts Included:
India may allow AI agents to make small UPI payments without per-transaction approval
The proposed framework is called the Unified Agent Protocol
The framework could be unveiled at the Global Fintech Fest in Mumbai next week
The National Payments Corporation of India (NPCI) operates UPI
NPCI had not immediately responded to Reuters' queries seeking comment
The proposal has not been formally confirmed by NPCI
Initial use cases are expected to focus on small and frequent payments, such as grocery purchases
E-commerce platforms could be among the early areas where such payments are used
Potential use cases could extend to more complex transactions over time
AI agents could potentially identify offers and discounts and place orders based on user-defined instructions
More advanced applications could include investments based on specified price thresholds
The system could use existing UPI mechanisms such as UPI Circle and Reserve Pay
NPCI is expected to provide infrastructure allowing merchants to integrate with the system
Users could set rules covering how much an AI agent can spend and when it can make a payment
Spending limits, identity checks, and audit trails are among the safeguards reportedly being considered
NPCI plans to establish a liability framework, although details were not available
India would not be developing agentic payments in isolation
Mastercard has developed Agent Pay, an infrastructure for AI agents to conduct payments
Visa has been developing infrastructure for agent-led commerce
In India, Mastercard has already conducted agentic commerce transactions with businesses
Fintech companies including Pine Labs have been developing infrastructure for AI-led payments
The framework is still a proposed development, with final features depending on NPCI's formal announcement
Framing: Announces India's preparation of a framework to allow AI agents to make small payments without per-transaction approval. — Neutral, factual reporting of a policy development.
Facts Included:
India is preparing a framework to allow AI agents to make small digital payments without approval for every transaction.
The information comes from three sources familiar with the matter.
UPI is operated by the National Payments Corporation of India.
A 2025 IMF report described UPI as the world's largest retail fast-payment system by transaction volume.
The Unified Agent Protocol is likely to be unveiled next week at the Global Fintech Fest in Mumbai.
The NPCI did not respond to Reuters queries.
Low-value, frequent purchases such as groceries are likely to be among the first use cases.
E-commerce platforms are well-placed to capture early demand.
NPCI expects use cases to eventually become more sophisticated.
AI agents could place orders based on sale offers and discounts and make investments based on specified instructions around price thresholds.
The protocol is expected to draw on two existing UPI mechanisms: UPI Circle and Reserve Pay.
UPI Circle lets a primary account holder delegate payment authority to a secondary user such as an AI agent.
Reserve Pay lets customers block funds for multiple debits.
Banks currently cap such blocks at 10,000 rupees for up to 90 days, though this limit may be revisited for agentic use.
NPCI is expected to offer infrastructure for merchants to integrate directly, letting customers set rule-based instructions for AI agents with built-in spending limits, audit trails and identity checks.
The NPCI plans to build in a liability framework but did not provide details.
Mastercard and Visa are also building similar agentic capabilities for payments in India.
Mastercard completed its first authenticated agentic transaction in New Delhi in June.
Pine Labs launched its own agentic protocol, P3P, letting AI agents complete UPI payments after a single upfront authorisation.
Framing: India preparing rollout of agentic payments on UPI
Facts Included:
India is preparing a framework that would let AI agents make small digital payments without approval for every transaction, according to three sources familiar with the matter.
UPI is operated by the National Payments Corporation of India and is the world's largest retail fast-payment system by transaction volume, according to a 2025 IMF report.
The Unified Agent Protocol is likely to be unveiled next week at the Global Fintech Fest in Mumbai, the sources said, requesting anonymity as the details are private.
The NPCI did not immediately respond to Reuters queries seeking comment.
Low-value, frequent purchases such as groceries are likely to be among the first use cases, the first source said.
The protocol is expected to draw on two existing UPI mechanisms — UPI Circle and Reserve Pay.
Banks currently cap such blocks at ₹10,000 for up to 90 days, though this limit and its validity may be revisited for agentic use, the sources added.
NPCI is expected to offer infrastructure for merchants to integrate directly, letting customers set rule-based instructions for AI agents on when and how much to pay, with built-in spending limits, audit trails and identity checks, the sources said.
Mastercard completed its first authenticated agentic transaction in New Delhi in June.
Earlier this year, fintech firm Pine Labs launched its own agentic protocol, P3P, letting AI agents complete UPI payments after a single upfront authorisation.
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ClaimIndia is preparing a framework that would let AI agents make small digital payments without approval for every transaction, according to three sources familiar with the matter.