ChatGPT to Soon Enable Direct UPI Payments

Indian consumers are poised to experience a significant transformation in online shopping and payments with the introduction of AI-powered transactional capabilities through chatbots like ChatGPT. The National Payments Corporation of India (NPCI), the government agency responsible for the United Payments Interface (UPI), has formally partnered with OpenAI and Razorpay to enable users to make direct payments seamlessly through ChatGPT. This initiative aims to simplify the transaction process, allowing users to shop and pay for goods and services without leaving the conversational AI environment, effectively merging conversational interfaces with digital payments.

This move aligns with global trends, following announcements by tech giants such as Google and Perplexity, which have introduced their own AI-driven payment services. Razorpay, a leading Indian fintech firm, revealed that it has begun privately testing the beta version of its “Agentic Payments” system. This feature allows users to autonomously complete transactions within the AI platform itself, bypassing the need to switch between apps or web interfaces. By integrating payments directly into the chat interface, users can conduct purchases more efficiently while remaining engaged with the AI assistant.

The ongoing pilot project, according to Reuters, is intended to explore how UPI can be leveraged to “autonomously complete transactions on behalf of users in a safe, secure, and user-controlled manner.” The technology will rely on newly introduced UPI features, such as the ‘reserve pay’ option, which allows users to earmark a specific portion of funds for designated merchants. Additionally, the UPI Circle feature ensures that users can make payments without exiting the app or platform they are currently using. Together, these functionalities aim to enhance security and user control while streamlining the payment process.

For the pilot program, Airtel Payments Bank and Axis Bank have been designated as banking partners. E-commerce and digital platforms such as Tata Group’s BigBasket and Vodafone Idea will be among the first to facilitate payments through ChatGPT, enabling users to complete purchases within the AI platform. Razorpay co-founder and CEO Harshil Mathur noted in a statement to TechCrunch that trials for the new agentic AI payment system have also been conducted with other AI chatbots, including Gemini and Claude, to ensure compatibility and performance across different AI platforms. While these trials have been successful, full-scale implementation and integration of the system will take several weeks.

Currently, the plan for agentic AI payments in India does not include any specific revenue-sharing arrangements between AI companies, merchants, or payment providers. However, the system is expected to bolster user engagement and retention for companies such as OpenAI and Google by providing a more seamless and integrated shopping experience. Privacy and security considerations have been carefully addressed: AI companies will not gain access to payment data, and users must authorize transactions using a two-factor authentication system, maintaining a high level of security.

In conclusion, India’s entry into AI-powered payments via chatbots represents a major step forward in integrating artificial intelligence with financial technology. By enabling direct UPI payments through conversational AI interfaces like ChatGPT, this initiative promises to simplify online transactions, improve user engagement, and provide a secure and user-controlled payment environment. It also places India at the forefront of global innovation in AI-driven commerce, potentially influencing how digital payments and AI interaction converge in the near future.