Pine Labs Launches P3P Agentic Payment Protocol for Autonomous UPI Transactions in India

Highlights

• The P3P system enables AI agents to make UPI payments
• Users can set spending rules for AI to carry out purchases
• Pine Labs has partnered with Grantex for added security

The Pine Labs Payment Protocol (P3P) was launched in India on Thursday. The financial technology company said that it is a new payment infrastructure that enables AI agents to autonomously complete UPI transactions. P3P is claimed to eliminate the need for manual authentication during payments. It is built upon the existing UPI mandate framework. As per the company, users can authorise spending rules once and let AI agents execute purchases on their behalf.

Pine Labs' P3P System for Agentic Commerce

The company says that the country's existing UPI infrastructure is designed around human-initiated transactions. This means users have to authenticate payments using methods such as MPINs. While it has been successful for digital payments, the company said that it creates a bottleneck for agentic commerce, a recently developing industry where AI systems have the capability of autonomously browsing, comparing products, negotiating prices, and completing purchases.

The P3P system aims to address these limitations by extending UPI's existing mandate-based architecture. It also builds upon existing frameworks like One Time Mandates (OTM), Reserve Pay, and Single Block Multiple Debit (SBMD). To begin with, users are required to provide approval through a one-time authorisation process. Once established, an AI agent can execute transactions automatically within the predefined limits. It does not request additional authentication for every purchase.

The company has partnered with Grantex to provide identity verification, delegated authorisation, spending controls, compliance checks, and audit trails. The protocol is also claimed to incorporate HTTP 402, which is the web standard for machine-readable payment requests and facilitates agent-to-agent payment interactions.

Pine Labs emphasised that users still retain control throughout the entire process. They can define spending limits, verify the identity of AI agents, review previous transactions, and revoke permissions.

The P3P system is already said to be live in production and is being deployed across multiple industries. For example, digital gold investment platform Gullak has integrated P3P into its service. Electronics retailer Vijay Sales is also conducting a proof-of-concept deployment of the protocol. Currently restricted to UPI, the fintech company is working with major card networks to extend the protocol to card-based transactions, too.

Citing industry estimates, Pine Labs projected the global agentic commerce market to reach $65.47 billion (roughly Rs. 6.22 lakh crore) by 2033. India is claimed to play a key role in the growth of autonomous commerce due to its extensive UPI infrastructure.