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Imagine you ask your AI assistant to book a Mumbai-Delhi flight for next Tuesday, and it doesn’t just show you the options – it itself chooses the best option, fills in your details and makes the payment. The special thing is that all this happens without you doing anything, just at your request.
Today, artificial intelligence (AI) agents can search, compare, and make recommendations for tasks like booking a flight or shopping online. But when it comes to making payments through Unified Payments Interface (UPI), this process comes to a halt. This is because only users and registered payment apps can do UPI transactions, not AI agents.
After some time you may see this happening. National Payment Corporation of India is working on one such system, whose name is Unified Agent Protocol. Under this system, your payment will be done only through AI. Neither a QR code nor any kind of PIN will be required for this. Let us try to understand about it in detail…
Why can’t AI make direct payments today?
UPI has features like AutoPay and Reserve Pay, which provide users the facility to permit recurring or future payments by setting a spending limit and authenticating once with their UPI PIN. These are typically used for subscription services like Netflix or other pre-approved transactions.
But this is not the same as allowing an AI agent to independently make purchasing decisions and make payments on the user’s behalf. To bridge this gap, NPCI is reportedly developing a Unified Agent Protocol (UAP). It is a proposed framework to verify and authorize AI agents within the UPI ecosystem.
What kind of change can come from UAP?
According to a Business Standard report, UAP is being designed to create a reliable, common and interoperable infrastructure. Through this, AI agents can be registered, verified and authorized to conduct transactions in the UPI ecosystem, and for this there will be no need to make any changes in the existing infrastructure of the payment system.
UAP will not replace UPI. Instead, it will act as a verification layer on top of existing systems, allowing trusted AI agents to securely interact with UPI while maintaining the existing payments infrastructure.
If implemented, UAP will provide a way for the payment ecosystem to verify that an AI agent is acting with the user’s consent before a transaction is processed.
How can this work?
Although little is known about how it will work, it is expected that UAP will work on top of the existing UPI infrastructure. The payment method can be something like this:
User will give instructions → AI assistant will compare the options, then choose the best option and generate payment request. The UAP will then verify that the AI agent is registered, trusted, and authorized to act on the user’s behalf. The request will be sent via UPI, the user will either approve the transaction, or in case of already approved payment within the specified limit, the payment will be automatically completed based on the applicable rules.
Will AI get full access to your money?
No, not necessary. Although the final framework is yet to be announced, the system is expected to work like existing UPI services like AutoPay and Reserve Pay, where users pre-approve a spending limit rather than being given unlimited access to their bank account.
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, set limits on that authority, and impose accountability if those limits are violated. However, the final safeguards will depend on how NPCI and the Reserve Bank of India (RBI) design the framework. NPCI will also need RBI approval before launching the UAP.
What could go wrong?
As payment systems evolve to include AI agents, cyber criminals and fraudsters will also try to take advantage of them. Giving AI assistants permission to make purchases on behalf of the user creates new challenges related to safety and consumer protection. Although this technology is still in its early stages, it also brings new risks.
Why is this important?
If implemented, UAP could make India one of the first countries to create a national infrastructure for agent payments. This could transform UPI from a payments system that users manually operate to one that can be used by trusted AI agents on their behalf.
