India could soon allow AI agents to make small UPI payments without requiring approval for every transaction, under a proposed Unified Agent Protocol. Users may set spending limits and rules, while safeguards such as identity checks and audit trails could apply. The framework has not yet been formally confirmed by NPCI.

India's digital payments system, which has moved from PINs and OTPs to fingerprint and facial authentication, could be headed toward a new phase - hands-free transactions where AI agents recognise users, evaluate purchases and complete payments with little to no manual intervention.

According to a Reuters report, the government may soon permit AI agents to process small UPI transactions without requiring the user's approval for every single payment. The framework, called the Unified Agent Protocol, could reportedly be unveiled at the Global Fintech Fest in Mumbai next week. The National Payments Corporation of India (NPCI) has not formally confirmed the proposal.

What the framework would allow

If implemented as reported, the protocol would let users grant AI agents restricted payment authority based on pre-set conditions, replacing the need to approve each transaction individually. The early rollout is expected to centre on small, frequent purchases such as groceries, with e-commerce platforms likely among the first areas of adoption. Reuters reported that the scope could eventually widen to cover more complex transactions.