Fintech startup Pine Labs is in talks with the National Payments Corporation of India (NPCI) to enable autonomous UPI and card payments for merchants through its Model Context Protocol (MCP) server, the company disclosed in its Q4 FY26 shareholder letter, according to medianama.com. The discussions aim to integrate AI-driven payment capabilities, though specific details and pricing remain undisclosed.
The MCP server is designed to facilitate autonomous payment transactions by allowing AI agents to operate on behalf of merchants within predefined limits. Pine Labs previously introduced agentic bill payments using large language models (LLMs), but CEO Amrish Rau declined to comment on data privacy during the Q3 FY26 earnings call. The company has yet to clarify how much merchant data is shared with AI providers like OpenAI and Anthropic or how this data is used for model training, as noted by medianama.com.
This development could mark a significant shift in the payments landscape by automating merchant transactions through AI, potentially increasing efficiency and reducing manual intervention. Pine Labs’ initiative aligns with broader trends in fintech where AI integration is becoming more prevalent. The collaboration with NPCI, which governs UPI payments in India, underscores the growing institutional interest in AI-powered financial services.
Pine Labs has not provided a timeline for the rollout of the MCP server or further details on merchant use cases. The company’s response to queries about data privacy and operational mechanics is pending, with updates expected once more information is available, medianama.com reported. Observers will watch for how this integration impacts merchant adoption and regulatory scrutiny.