The product demo was intriguing. It started off with someone uploading a grocery list on ChatGPT and asking it to place an order via Bigbasket. Then, within the chat interface, after a couple of confirmations, the purchase is complete, without the user ever leaving the screen, all using UPI.\u00a0<\/p>\n
As with most things around UPI, this was met with massive hyperbole.<\/p>\n
Building a way for automated agents to complete payments right inside ChatGPT felt disruptive, innovative, and like a game-changer. Once again, India had used its world-class payment infrastructure to show the world how it was done.<\/p>\n
Except the rest of the world already had it the previous week.\u00a0<\/p>\n
Here\u2019s OpenAI\u2019s announcement:<\/p>\n
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OpenAI said that they\u2019re \u201ctaking first steps toward agentic commerce in ChatGPT with new ways for people, AI agents, and businesses to shop together.\u201d Here\u2019s how OpenAI described this feature in their launch announcement:<\/p>\n
When someone asks a shopping question\u2014\u201cbest running shoes under $100\u201d or \u201cgifts for a ceramics lover\u201d\u2014ChatGPT shows the most relevant products from across the web. Product results are organic and unsponsored, ranked purely on relevance to the user.<\/p>\n
If a product supports Instant Checkout, users can tap \u201cBuy,\u201d confirm their order, shipping, and payment details, and complete the purchase without ever leaving the chat. Existing ChatGPT subscribers can pay with their card on file, or other card and express payment options.<\/p>\n
Orders, payments, and fulfillment are handled by the merchant using their existing systems. ChatGPT simply acts as the user\u2019s AI agent\u2014securely passing information between user and merchant, just like a digital personal shopper would.<\/p>\n
The reason I bring this up is because it\u2019s yet another sign of something that\u2019s becoming more obvious\u2014UPI is slowly taking the long way around to end up where the rest of the world already was.\u00a0<\/p>\n
Making payments using QR codes on mobile devices is admittedly a great innovation, and if UPI had stopped there, it would have been fine.<\/p>\n
But now, it\u2019s trying to shove and contort itself to do things it was never intended to do.\u00a0<\/p>\n
Nothing makes this more apparent than AI and conversational commerce, which are forcing UPI to add features that look like \u201cinnovation\u201d but actually make it a clunkier, less effective version of what credit card issuers had already figured out.<\/p>\n
If you don\u2019t believe me, UPI didn\u2019t need one, but two major enhancements to make this work. The first was UPI Circle, which was primarily used as a way for users to \u201callow\u201d other users to make payments from their account without needing to enter a PIN number. Until now, this was used by, say, parents who wanted to give access to their children or elderly parents. Then, last week, at Global Fintech Fest, they announced a new feature called \u201cUPI Reserve Pay\u201d, which lets users whitelist certain merchants to \u201creserve\u201d funds and make payments without a two-factor confirmation, up to certain limits.\u00a0<\/p>\n
You can see where this is going. Imagine creating a UPI Circle but instead of adding family members, you add a digital agent. Then, combine that with UPI Reserve Pay, which lets you whitelist certain merchants. If you link the two and integrate them properly, you can technically make UPI payments from within a chat window.<\/p>\n
Now really look at this. You\u2019ll notice that UPI Circle is essentially a way to let someone make a purchase on your behalf without needing a PIN number, which the rest of the world has already solved by letting customers add authorised users to their credit cards.\u00a0<\/p>\n
UPI Reserve Pay is just a new avatar of something India had already figured out a decade ago\u2014making funds available exclusively at the merchant level, like wallets used to do.<\/p>\n
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