Pine Labs introduced the Pine Labs Payment Protocol (P3P), an AI-enabled system that allows software agents to make payments on behalf of users without requiring approval for each transaction, according to medianama.com. The protocol operates on the Unified Payments Interface (UPI) and lets users set spending limits with a one-time mandate, enabling AI agents to transact autonomously within those bounds.
P3P combines three components: UPI’s mandate frameworks including Single Block Multiple Debit (SBMD) and One Time Mandate (OTM), a new identity layer called Grantex that verifies AI agents and enforces spending limits, and the Hypertext Transfer Protocol 402 (HTTP 402), an open web standard that enables machine-readable payment requests. Users approve the mandate by scanning a code in their UPI app, after which AI agents can debit payments against the reserved funds without further user intervention.
This launch raises questions about liability, privacy, and regulatory compliance under existing UPI rules, as Pine Labs’ protocol allows AI agents to act independently within pre-approved limits. The use of HTTP 402 as an open standard could enable any AI assistant on any platform to integrate with P3P, potentially expanding automated payments beyond traditional apps. The protocol’s design aims to balance user control with automation, but its adoption could prompt regulatory scrutiny given the novel use of AI in financial transactions.
Pine Labs’ P3P represents a significant step in automating payments on UPI, with the system already live and accessible to users who set up mandates in their UPI apps. The protocol’s combination of existing UPI mandate frameworks and new identity verification layers sets a precedent for AI-driven payments in India’s digital finance ecosystem.