The proposed framework, called the Unified Agent Protocol, could be unveiled at the Global Fintech Fest in Mumbai next week, the sources told Reuters.
The National Payments Corporation of India (NPCI), which operates UPI, had not immediately responded to Reuters’ queries seeking comment.
The proposal has not been formally confirmed by NPCI. If introduced in the reported form, it would allow users to give AI agents limited authority to make payments based on pre-set instructions rather than approving each transaction individually.
What could change if the framework is confirmed
The initial use cases are expected to focus on small and frequent payments, such as grocery purchases, according to Reuters. E-commerce platforms could be among the early areas where such payments are used.
Over time, the potential use cases could extend to more complex transactions.
Reuters reported that 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, although such uses would depend on how the framework is ultimately designed and regulated.
The reported system could use existing UPI mechanisms such as UPI Circle, which allows payment authority to be delegated, and Reserve Pay, which enables funds to be set aside for specified payments.
According to the Reuters report, NPCI is also expected to provide infrastructure allowing merchants to integrate with the system. Users could potentially 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. Reuters also reported that NPCI plans to establish a liability framework, although details were not available.
This would mean the key change is not simply that an AI can initiate a payment. The proposed model would allow the user to give the agent pre-authorised, rule-based payment authority, within limits set by the system.
What other countries and payment networks are doing
India would not be developing agentic payments in isolation. Payment networks and fintech companies in other markets have already been working on systems that allow AI agents to participate in commerce.
Mastercard has developed Agent Pay, an infrastructure designed to allow AI agents to conduct payments while using controls around trust, security and transaction visibility.
Visa has also been developing infrastructure for agent-led commerce. The broader approach being explored by payment companies is to allow an AI agent to search for products, make choices based on instructions and initiate transactions, while retaining authentication and other controls.
In India, Mastercard has already conducted agentic commerce transactions with businesses, while fintech companies including Pine Labs have also been developing infrastructure for AI-led payments.
Why UPI matters
UPI’s scale makes the proposed development significant if it is implemented. The platform processed 24.51 billion transactions worth ₹29.82 lakh crore in August.
However, the reported framework is still a proposed development. Its final features, transaction limits, safeguards, liability rules and rollout timeline would depend on what NPCI formally announces, if and when it does so.
