Now, your AI—not you—will make UPI payments! Find out what the ‘Unified Agent Protocol’ is..

Imagine asking your AI assistant to book a Mumbai-Delhi flight for next Tuesday; instead of just showing you options, it selects the best one, fills in your details, and completes the payment—all without you lifting a finger, simply based on your request.

Currently, Artificial Intelligence (AI) agents can search for options, compare them, and offer suggestions for tasks like booking flights or online shopping. However, the process hits a roadblock when it comes to making payments via the Unified Payments Interface (UPI). This is because only users and registered payment apps—not AI agents—can execute UPI transactions.

You might soon see this become a reality. The National Payments Corporation of India (NPCI) is working on a system called the Unified Agent Protocol. Under this system, payments will be processed directly through AI, eliminating the need for QR codes or PINs. Let’s understand this in greater detail...

Why can't AI make direct payments today?
UPI already includes features like AutoPay and Reserve Pay, which allow users to authorize recurring or future payments by setting spending limits and authenticating once with their UPI PIN. These are typically used for subscription services like Netflix or other pre-approved transactions.

However, this is not the same as allowing an AI agent to make independent purchasing decisions and execute payments on the user's behalf. To bridge this gap, the NPCI is reportedly developing the Unified Agent Protocol (UAP). This is a proposed framework designed to verify and authorize AI agents within the UPI ecosystem.

What changes could UAP bring? According to a Business Standard report, the UAP is being designed to create a trusted, standardized, and interoperable infrastructure. It will enable AI agents to register, undergo verification, and gain authorization to conduct transactions within the UPI ecosystem, all without requiring changes to the existing payment system infrastructure.

The UAP will not replace UPI. Instead, it will function as a verification layer atop the existing system, allowing trusted AI agents to interact securely with UPI while utilizing the current payment infrastructure.

If implemented, the UAP will provide the payment ecosystem with a mechanism to verify that an AI agent is acting with the user's consent before a transaction is processed.

How might it work?
While details regarding its exact operation are limited, the UAP is expected to operate over the existing UPI infrastructure. The payment process could look something like this:

The user provides an instruction → The AI ​​assistant compares options, selects the best one, and generates a payment request. Subsequently, the UAP verifies that the AI ​​agent is registered, trusted, and authorized to act on the user's behalf. The request is sent via UPI; the user either approves the transaction, or—in the case of pre-approved payments within set limits—the payment is completed automatically in accordance with applicable rules.

Will AI gain full access to your money?
No, not necessarily. Although the final framework has yet to be announced, the system is expected to function similarly to existing UPI services like AutoPay and Reserve Pay, where users pre-approve spending limits rather than granting unlimited access to their bank accounts. According to earlier media reports, the proposed protocol is expected to verify whether an AI agent is authorized to act on a user's behalf, define the scope of that authorization, and establish accountability in the event of any violations. However, the final safeguards will depend on how the NPCI and the Reserve Bank of India (RBI) design the framework. The NPCI will also require RBI approval before launching the UAP.

What could go wrong?
As payment systems evolve to incorporate AI agents, cybercriminals and fraudsters will also attempt to exploit them. Granting AI assistants permission to make purchases on behalf of users creates new challenges regarding safety and consumer protection. Although the technology is still in its early stages, it brings with it new risks.

Why is this important?
If implemented, the UAP could place India among the first nations to establish national infrastructure for "agentic payments" (payments executed via agents). It could transform UPI from a payment system operated manually by users into one that trusted AI agents can utilize on their behalf.

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