AI will soon handle your UPI payments; transactions will occur without a PIN or OTP.

The way UPI payments work could soon change. The NPCI is developing a system of AI agents capable of making small, routine payments based on limits set by the user.

If you find it tedious to enter a PIN or manually approve every UPI transaction, AI could soon handle this task for you. Work is underway on AI agents designed to make small payments on your behalf, making UPI transactions in India even easier than before. To facilitate this, the National Payments Corporation of India (NPCI) is creating a registry to identify and monitor the AI ​​agents that will execute these UPI payments.

How will AI agents make UPI payments?

In the near future, AI agents will be able to independently execute digital payments on behalf of the user, following pre-set parameters. This means the need to manually open the UPI app for every transaction could be reduced. Initially, this system is expected to be used for low-value purchases, such as groceries. A key feature is that separate approval will not be required for every individual small transaction.

How will payments occur without a PIN or OTP each time?

The primary objective of this new system is to enable AI agents to make payments based on rules established by the user. However, this does not mean that the requirement for PINs and OTPs in UPI payments will be eliminated entirely. Instead, a system is being developed to address aspects such as AI agent identification, user authorization, transaction limits, and handling erroneous payments.

Significantly, while this new system may reduce the need for you to manually enter a PIN or OTP for every small payment, the identification and authorization of the agent will remain essential to ensure transaction security.