India has initiated a pilot program allowing consumers to make purchases and payments directly within AI chatbots, beginning with OpenAI's ChatGPT. The project is a collaboration between the National Payments Corporation of India (NPCI), fintech firm Razorpay, and OpenAI, aiming to integrate the country's Unified Payments Interface (UPI) into conversational AI platforms.
The new system allows users to complete transactions without leaving the chatbot interface, marking a significant step toward conversational commerce in one of the world's largest digital economies. Integrations with Google's Gemini and Anthropic's Claude are also planned for the near future.
Key Takeaways
- India has launched a pilot program for direct shopping and payments through AI chatbots, starting with ChatGPT.
- The initiative is led by the National Payments Corporation of India (NPCI) in partnership with Razorpay and OpenAI.
- The system is built on new UPI protocols that enable secure in-app transactions without redirecting users.
- Initial merchant partners include online grocer BigBasket and telecom operator Vi.
- Future integrations with Google's Gemini and Anthropic's Claude are already in development and expected soon.
A New Framework for Conversational Commerce
The National Payments Corporation of India (NPCI), the organization behind the widely adopted Unified Payments Interface (UPI), announced the launch of a nationwide pilot program on Thursday. This initiative partners with fintech company Razorpay to embed payment functionalities directly into AI chatbots, with OpenAI's ChatGPT being the first platform to feature the integration.
Fintech platform Razorpay confirmed that the pilot has been rolled out across the country and is expected to become widely available to consumers over the next few months. Razorpay developed the crucial merchant integration layer that allows businesses to facilitate transactions within these AI environments.
The initial phase of the pilot includes two major companies as merchant partners. Customers can now use the feature to shop for groceries from BigBasket, an online grocer owned by Tata Group, or to purchase mobile recharge plans from telecom provider Vi, all from within a conversation with ChatGPT.
The Underlying Technology Driving the Pilot
This seamless payment experience is made possible by two new protocols from NPCI. The first is UPI Reserve Pay, which allows a user to block a specific amount of funds in their bank account for a future payment to a designated merchant. This ensures funds are available without an immediate debit.
The second protocol is UPI Circle, a solution that delegates the authentication process. This feature is key to allowing the payment to be completed directly within the chatbot, eliminating the need to switch to a separate banking or payment application to authorize the transaction.
UPI's Dominance in India
The Unified Payments Interface (UPI) is the leading digital payment method in India, processing over 20 billion transactions each month. Integrating this system into AI chatbots could significantly expand its reach and use cases.
Strategic Importance for Global AI Companies
India represents a critical market for global AI firms. As the world's most populous nation with over a billion internet subscribers, it is already one of the top markets for ChatGPT usage. This commerce pilot is part of a larger strategy by companies like OpenAI to deepen their engagement with Indian users and integrate into the country's fast-growing digital economy.
OpenAI has previously taken steps to attract more users in the country, such as launching a lower-cost ChatGPT Go subscription plan in August. This new payment feature moves beyond simple access, embedding the AI tool into the daily commercial activities of consumers.
"It’s not just a payment experience," said Harshil Mathur, co-founder and CEO of Razorpay, in an interview. "It’s a whole new discovery and commerce experience."
While the current pilot does not have a specific revenue-sharing model, the initiative is expected to significantly boost user retention for the participating AI companies by making their platforms more functional and indispensable.
Expanding the AI Payment Ecosystem
The collaboration is not limited to OpenAI. Razorpay is poised to expand this capability to other leading AI models. Harshil Mathur confirmed that the company has already completed a proof-of-concept for the same payment experience with Google's Gemini and Anthropic's Claude.
He stated that these integrations are expected to go live for consumers within a few weeks. Furthermore, Razorpay is in discussions with additional merchants beyond BigBasket and Vi, anticipating a broader rollout of participating businesses in the coming months.
The Rise of Agentic Commerce
This initiative is part of a global trend known as "agentic commerce," where AI agents are empowered to perform transactions on behalf of users. Last month, OpenAI introduced an "Instant Checkout" feature with its Agentic Commerce Protocol, developed with Stripe. Similarly, Google has launched its own Agent Payments Protocol to enable similar functionalities.
Data Security and User Authorization
A key aspect of the new system is data privacy. According to Mathur, the AI companies involved, including OpenAI, will not have access to any user payment data. All transactions are handled securely through the UPI framework.
Users will retain full control over their funds. Each transaction made through a chatbot will require pre-authorization using two-factor authentication, ensuring that payments are both intentional and secure.
The Broader Industry Response
Other players in India's fintech space are also moving to capitalize on the trend of agentic payments. Cashfree Payments, an online merchant payments startup, has launched its own solution called the Agentic Payments MCP (Merchant Category Code).
This platform allows merchants to enable payments directly through their own shopping agents. Cashfree's solution supports various payment methods, including UPI and cards. However, it requires merchants to develop their own AI agents to integrate with the system.
"This is still an early, forward-looking concept, but one with tremendous potential," Reeju Datta, co-founder of Cashfree Payments, told reporters. "Its adoption will naturally grow in line with how fast shopping agents take off."
As AI becomes more integrated into daily life, embedding secure and convenient payment systems directly into conversational interfaces represents the next frontier for both the technology and financial sectors in India and globally.