India has launched a groundbreaking pilot program enabling consumers to shop and make payments directly through advanced AI chatbots, marking the nation as a significant emerging market for global artificial intelligence firms. This initiative, spearheaded by the National Payments Corporation of India (NPCI) – the federal body overseeing the widely adopted Unified Payments Interface (UPI) – commenced with a partnership involving OpenAI's ChatGPT and fintech company Razorpay. Future integrations are already in development for Google's Gemini and Anthropic's Claude, with Razorpay confirming a nationwide rollout of the pilot program in the coming months.

The innovative payment experience is built upon two new NPCI protocols: UPI Reserve Pay and UPI Circle. UPI Reserve Pay introduces a mechanism that allows users to pre-authorize and block specific amounts of funds, designated for future debits to particular merchants. Complementing this, UPI Circle provides a solution for delegating UPI authentication, which facilitates the completion of payments directly within the AI chatbot interface, eliminating the need for users to switch to external applications or websites. Razorpay's crucial role in this ecosystem involves developing the merchant integration layer, which empowers businesses to conduct transactions seamlessly through these AI chatbots.

Initially, the pilot program features prominent Indian enterprises as merchant partners. Tata Group-owned online grocer Bigbasket and telecom operator Vi are among the first to participate, allowing their customers to conveniently shop for groceries or purchase mobile recharge plans directly via ChatGPT. The banking infrastructure for these transactions is robustly supported by Axis Bank and Airtel Payments Bank, ensuring secure and efficient financial operations.

For OpenAI, India represents one of its largest markets for ChatGPT, home to over a billion internet subscribers. The company has actively sought to expand its presence, including launching a sub-$5 ChatGPT Go plan to attract more users. This commerce pilot is a strategic component of OpenAI's broader efforts to deepen user engagement and capitalize on India's rapidly burgeoning digital economy. Harshil Mathur, co-founder and CEO of Razorpay, emphasized the transformative nature of this development, stating it transcends a mere payment experience to become "a whole new discovery and commerce experience."

UPI has already achieved immense success in India, processing more than 20 billion transactions monthly and standing as the country's primary digital payments channel. This new AI-led integration has the potential to drive even greater adoption by embedding UPI directly into everyday commerce, provided consumers embrace chatbots as a novel interface for shopping. Mathur also disclosed that Razorpay has successfully completed a proof-of-concept for this agentic payment experience with both Google's Gemini and Anthropic's Claude, with these integrations expected to go live for consumers within weeks. Furthermore, Razorpay is actively engaging with additional merchants beyond Bigbasket and Vi, anticipating a wider rollout in the forthcoming months.

Like OpenAI, Google and Anthropic are also witnessing a significant increase in user adoption from India. While Google benefits from a well-established local presence through mass-market products like Android, Search, and YouTube, OpenAI and Anthropic are actively working to establish their footprints and localize their AI offerings specifically for Indian users. Importantly, India's current framework for agentic payments does not incorporate a specific revenue-sharing model for the partners involved. However, this strategic move is expected to bolster user retention for AI companies by seamlessly integrating their services into transactional workflows.

Regarding data privacy and security, Mathur confirmed that AI companies will not be granted access to payment data under this new arrangement. User transactions conducted via chatbots will require pre-authorization of the amount through a secure two-factor authentication process, ensuring a high level of consumer protection. This development aligns with broader global trends in AI-driven commerce; OpenAI previously introduced an "Instant Checkout" experience and its Agentic Commerce Protocol, developed in collaboration with Stripe. Similarly, Google launched its Agent Payments Protocol to empower AI agents to execute transactions on behalf of users.

The potential for this technology is significant, as noted by Reeju Datta, co-founder of Cashfree Payments, who described it as "still an early, forward-looking concept, but one with tremendous potential. Its adoption will naturally grow in line with how fast shopping agents take off." In addition to Razorpay, online merchant payments startup Cashfree Payments has also unveiled its Agentic Payments MCP (Merchant Commerce Protocol), designed to enable merchants to facilitate payments directly through their own shopping agents. Cashfree's solution supports a wide array of major payment methods, including cards and UPI, although merchants are responsible for developing their own shopping agents for integration with the MCP. The startup showcased this capability with a video demonstrating a chatbot assisting users in purchasing an iPhone, and is currently exploring partnerships with large enterprise merchants across various categories like e-commerce and lending.