UPI payments may become easier in the future as AI agents could be used to make small transactions on behalf of users. This could reduce the need to enter a UPI PIN or manually approve every small payment.
The National Payments Corporation of India (NPCI) is working on a registry to identify and monitor AI agents that make payments through UPI. The system is being developed to support safer use of AI in digital payments.
AI Agents Could Make UPI Payments Automatically
In the future, AI agents may be able to process digital payments according to rules set by users. This could reduce the need to open a UPI app and complete every payment manually.
The initial use is expected to focus on low-value purchases, such as grocery payments. Instead of approving each small transaction separately, users could allow an AI agent to handle payments within defined limits.
This could make everyday digital payments more convenient, especially for regular low-value purchases where users currently have to complete the payment process each time.
AI Agents and UPI Payment Security
The new system is not expected to completely remove the need for UPI PINs or OTPs. Instead, the focus is on creating a system where AI agents can make authorised payments while maintaining security controls.
The system will need to address important issues such as identifying AI agents, obtaining user authorisation, setting transaction limits and preventing fraudulent payment information.
PIN and OTP May Not Be Needed for Every Small Payment
The key change could be that users may not have to enter a PIN or OTP themselves for every small transaction. The AI agent would operate according to the permissions and limits provided by the user.
However, agent identification and proper authorisation will remain important for keeping these payments secure. The exact way these safeguards will work will be important as the system develops.
If implemented successfully, AI-based UPI payments could make routine small transactions faster while still keeping controls in place to protect users from unauthorised payments.
