NPCI Readies Unified Agent Protocol to Enable Small-Value UPI Payments Through AI Agents
NEW DELHI: The National Payments Corporation of India is preparing a framework to allow artificial intelligence agents to carry out small-value transactions on the Unified Payments Interface without requiring manual approval for every payment. According to a Reuters report, the retail payments umbrella entity is likely to unveil the framework, named the Unified Agent Protocol, next week at the Global Fintech Fest 2026 in Mumbai. Under the current architecture, users must confirm transactions before payments are completed, but the proposed protocol will automate the process for routine and low-value digital transactions where prior authorization has been granted.
Integration with Existing Architecture to Drive Delegation
The proposed framework is expected to leverage existing UPI functionalities, notably UPI Circle and Reserve Pay. UPI Circle permits primary account holders to delegate payment authority to another individual, while Reserve Pay facilitates payments within predetermined limits and conditions. By utilizing these tools, AI agents will be able to execute financial transfers under precise rules defined by users. Transaction limits, advance user consent, conditional triggers, and stringent safeguards will form the core operational parameters of the system, eliminating repetitive manual authentication for routine digital payments.
Fintech Sector Expands Work on Agentic Payment Systems
The move comes after NPCI successfully piloted an agentic payment mechanism last year, demonstrating the ability of AI tools to interact with payment networks. Several domestic fintech firms, including Razorpay, Pine Labs, and Cashfree, have also been building tools to support automated agent transactions. These technical advancements reflect a broader transition within the payments landscape, where artificial intelligence systems are shifting from serving as informational assistants to independently initiating and closing financial transactions within authorized parameters.
Stringent Controls and Risk Mitigation Remain Central
While agentic payments promise greater speed for low-value transfers, automated delegation also raises critical operational and security risks. Granting automated software the authority to execute transactions introduces potential challenges regarding incorrect instructions, fraudulent attempts, unauthorized transfers, and system errors. To mitigate these risks, the upcoming framework will rely heavily on explicit user permissions, automated transaction monitoring, active fraud detection algorithms, and dedicated mechanisms to halt or reverse suspicious payments. The precise transaction ceilings, operating guidelines, and security requirements will be established once NPCI formally publishes the implementation details of the protocol.
