Fintechs race to enable AI payments as agentic commerce awaits regulatory green light

Fintechs want to bank on agentic commerce

Fintech startups are gearing up for AI-powered commerce, linking digital payments with agentic platforms like ChatGPT and Claude. Payment firms including Razorpay, Cashfree, Visa, Mastercard and Pine Labs are building pipelines ahead of wide-scale adoption. Currently, end-to-end AI transactions aren't allowed by the RBI, but companies are preparing for the future. Fintech startups are hopping onto the artificial intelligence bandwagon as digital payments emerge as a critical linking point between search operations on AI-powered platforms and actual agentic commerce. Payment aggregators like Razorpay and Cashfree, card networks such as Visa and Mastercard, and merchant payment processors including PayU and Pine Labs are all working towards integrating with OpenAI's ChatGPT, Anthropic's Claude and other such platforms. While end-to-end AI-based commercial transactions are not allowed by the Reserve Bank of India, digital payment companies are building the pipelines to ensure that they are ready once agentic commerce sees wide-scale adoption. "As of now adoption is very low, but people are searching for merchandise on AI-powered apps. So, the next step is they will complete the transaction within those apps only; the payments industry is preparing for that," said the chief executive officer of a large digital payment firm. Payment processor Pine Labs announced that the company is integrating with Open AI's ChatGPT to enable agentic commerce and also will help merchants enable such transactions on AI-powered applications. "We will power merchants who want to be ready for commerce in an AI-powered world. Eventually we will also look to enable AI agents undertaking complete payment services," Pine Labs CEO Amrish Rau said. Pine Labs is looking to run experiments with AI agents undertaking complete transactions in Southeast Asia and the Gulf countries. Once the RBI opens up for agentic commerce, players will enable these payments in India too, Rau said. Currently, UPI's Reserve Pay is the only payment mechanism through which an AI agent can undertake a transaction, Razorpay CEO Harshil Mathur pointed out. UPI Reserve Pay is a mechanism where consumers are allowed to set a transaction limit for any specific merchant on a UPI app. Subsequent transactions with that merchant within the limit can flow without an OTP. "We are already live on Reserve Pay, this is a mode which is allowed by the RBI and where an agent can actually undertake the transaction on behalf of the customer without a second factor of authentication. For the other payment flows, human intervention is still needed," Mathur told ET. Card networks are pushing tokenised payments via AI agents, where the real card data remain masked and tokens can be stored with these AI platforms, thereby ensuring safety of transactions. Gautam Aggarwal, president, India and South Asia at Mastercard, told ET that these payments were awaiting RBI approvals and it could take some more months to go live. AI-powered commerce is still in a very nascent stage in India, industry insiders pointed out. Additionally, for card transactions to be enabled on AI systems, banks will need to come on board. So, the technology needs wider adoption and large industry players to come together. "First merchants need to enable such payments, then consumers need to come in as well, only then will the flywheel be in place. As of now, the plumbing is being put in place," Mathur of Razorpay said.

Mastercard and Visa enlist banks for agentic payment pilots

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Singapore-based DBS has become the first bank in Asia Pacific to pilot Visa Intelligent Commerce, the payment giant's suite of APIs and partner programme for consent-driven payments by AI agents on behalf of consumers. More than three quarters of Singapore residents are already using generative AI tools such as chatbots in their daily lives, according to a Visa-commissioned study. This momentum is also reflected in online shopping behaviours -- with eight in 10 Singapore consumers now relying on AI assistance for this. DBS and Visa have carried out a series of real-world food and beverage transactions to demonstrate that AI-powered agents can complete everyday tasks on behalf of customers using credit and debit cards via secure, issuer-controlled flows. Now, the partners plan to explore a wider range of agentic commerce transactions, such as online shopping, travel bookings and more. Ananya Sen, group head, regional consumer products, DBS Bank, says: "Our collaboration with Visa shows how agent-led payments can be deployed securely and safely at scale, giving customers confidence in how transactions are made in an AI environment." Separately, Visa rival Mastercard has been working with Westpac to carry out the first transaction in New Zealand to use its Agent Pay framework. Mastercard used a Westpac-issued debit card to purchase cinema tickets. The transaction was fully authorised with cardholder consent, and every participant in the payment flow - issuer, acquirer and merchant - could see and recognise that an agent conducted the transaction. Mastercard and Westpac have already worked together on agentic payment transactions in Australia. Says Westpac NZ MD, product, sustainability and marketing, Sarah Hearn: "Agentic AI has huge potential to improve payment experiences, and we're pleased to be working with Mastercard to bring the technology to our customers in the future." Mastercard has also been showing off the technology in India, using cards issued by Axis Bank and RBL Bank to complete transactions at the AI Impact Summit in New Delhi. "By completing a fully authenticated agentic commerce transaction on our network within a Large Language Model, we have shown what the future looks like: seamless, secure, end-to-end commerce powered by trusted AI," says Gautam Aggarwal, president, India and South Asia, Mastercard.

Mastercard's AI agent-led pay awaits approval: Top executive

Mastercard demonstrated India's first AI-driven agentic commerce transaction in a controlled sandbox, with real payments but simulated merchant environments. A full commercial rollout depends on regulatory clarity, expected in the coming months. The technology aims to automate purchases without human input while using existing secure payment systems like cards or UPI. Mastercard's 'first fully authenticated agentic commerce transaction' in India, which refers to an AI-driven purchase requiring no human input, was a controlled sandbox demonstration rather than a live commercial rollout, a top company executive told ET. A commercial rollout of such a technology hinges on regulatory clarity, which Mastercard's India and South Asia President Gautam Aggarwal said was expected over the next few months. He said the payments during the showcase were live on real systems and real cards, but merchants were connected through sandbox environments as no Indian platform is yet fully embedded into an AI agent ecosystem. "The payment was real, but the commerce side was still controlled," he said. The timeline for commercial rollout will depend on whether regulators treat agent-led payments as extensions of already approved technologies such as tokenisation and passkeys or require fresh approvals. "If no fresh approvals are needed, it could be a matter of a few months. If new clearances are required, it could take longer," Aggarwal said. He stressed that agentic commerce is rail-agnostic and can operate across cards or UPI, making it particularly relevant for India where both payment methods have wide adoption. "This is not about the payment method. It is about automating the entire commerce journey," he said. On security, Aggarwal said agent-led transactions rely on the same safeguards already used in digital payments. "We are not introducing any new technology. The transactions are as secure as what consumers use today. The real change is building trust in the agent," he explained. India's ability to scale digital innovations rapidly makes it well placed to adopt agentic commerce, with e-commerce, payments and banking likely to lead early usage, he noted. He said Mastercard is comfortable becoming the invisible infrastructure behind AI-driven transactions. "We already operate as plumbing in the system, and plumbing is where the scale will be in the future," Aggarwal said, signalling the company's long-term bet on powering commerce in the background rather than owning the consumer interface.