TLDRs;
- Mastercard demonstrates India’s first AI agent payment in sandbox awaiting regulatory approval
- Visa and Razorpay compete with Mastercard in the emerging AI commerce market
- Regulatory gaps in India create uncertainty for AI-agent payments rollout
- AI agents could automate routine transactions changing consumer payment experiences
Mastercard has taken a major step toward AI-powered commerce in India, conducting the country’s first agentic payment transaction in a controlled sandbox environment.
While the demonstration used real payment cards and actual transaction systems, the merchant interactions were simulated due to the absence of a fully integrated AI-agent ecosystem in India.
Gautam Aggarwal, Mastercard’s president for India and South Asia, emphasized that a commercial rollout is contingent on regulatory clarity.
“If authorities treat agent-led payments as extensions of existing methods like tokenization or passkeys, deployment could be rapid,” he said.
Otherwise, the process may take longer as guidelines are clarified. The platform is designed to work with multiple payment channels, including cards and UPI, aiming to automate everyday commerce processes.
AI Payments Spark Competitive Race
Mastercard’s AI initiative is part of a larger contest among global and local players to capture the emerging AI commerce market. Visa is already piloting its “Visa Intelligent Commerce” platform in the Asia Pacific, with wider trials slated for early 2026.
Meanwhile, Indian fintech company Razorpay has launched a private beta of “Agentic Payments” on ChatGPT, leveraging NPCI tools such as UPI Circle and UPI Reserve Pay. These tools allow users to pre-authorize AI agents within set spending limits, reducing repeated PIN or OTP verification for each transaction.
In addition, Mastercard and Visa are collaborating with tech giants including Microsoft, OpenAI, and IBM to ensure AI-driven commerce is secure and personalized, highlighting the strategic importance of partnerships in this fast-moving space.
Regulatory Uncertainty Challenges Expansion
Despite the technological progress, AI-agent commerce is navigating an unclear regulatory environment in India. Current laws, including the Digital Personal Data Protection Act and the draft DPDP Rules 2025, do not define delegated consent or AI-controlled, token-based payments. In this vacuum, payment networks and fintechs are effectively shaping operational standards.
Visa has introduced its Trusted Agent Protocol to help merchants recognize verified AI agents, but key regulators like the Reserve Bank of India (RBI), Ministry of Electronics and Information Technology (MeitY), and NPCI have yet to provide definitive guidance. This regulatory gap could influence rollout timelines and liability concerns, especially if AI agents make errors in processing transactions.
AI Agents Set to Transform Daily Payments
India’s growing AI adoption makes it an ideal testing ground. Razorpay cites the country as the fastest-growing user base for ChatGPT, while the Unified Payments Interface processed over 14 billion transactions in May 2024 alone. Once fully operational, AI agents could handle recurring payments or everyday purchases, streamlining processes for consumers. However, without established legal safeguards, questions remain about responsibility and dispute resolution in case of mistakes, even with existing security measures in place.
Mastercard’s incremental progress in India signals that AI-agent payments are moving closer to mainstream adoption, but the pace of expansion will ultimately depend on how regulators interpret emerging technologies. Investors appear cautiously optimistic, reflected in the modest upward movement of Mastercard’s stock, as the company positions itself at the forefront of the next generation of digital commerce.
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