Amid intensifying competition in the payment aggregator space, Indian fintech startups are jumping on to the agentic AI bandwagon and eyeing AI-readiness to retain merchants and online marketplaces.

Specifically, PAs such as Razorpay, Cashfree and PayU have integrated model context protocol (MCP) standards to create agent-like functionality for merchants on their payment gateways and settlement platforms.

MCP is a standard developed by Silicon Valley AI giant Anthropic to standardise how AI models interact with external tools, systems, and data sources. Leveraging MCP standards means the likes of Razorpay, Cashfree, PhonePe and others can connect LLMs to their proprietary data sources and offer seamless services for PA settlements and other use-cases such as payments orchestration.

India’s AI Uprising report by Inc42 highlighted that as AI agents become increasingly sophisticated and independent, they will need to integrate with external tools and services to complete practical tasks like email communication, sales outreach, or content publishing. The model context protocol facilitates these integrations by providing a standardised way for AI systems to connect with third-party applications.

Agentic AI Comes To The Fore

In April this year, Razorpay became one of the first fintech startups in India to bring in MCP to its payment gateway platform, enabling its merchant customers to integrate Razorpay APIs to their AI assistants.

Merchants can also build AI-powered tools that can interact with Razorpay’s payment ecosystem and use the company’s APIs to perform actions. This means a brand could create a chatbot that can enable consumers to check out from online stores using Razorpay seamlessly.

Cashfree Payments and PayU also opted to follow a similar route, creating bridges between their merchants’ online platforms and the payment gateways. Will this kickstart the next phase of online payment user journeys in India?

Agentic AI is seen as the biggest step-up within generative AI use-cases in recent times. Adoption has thus far been more prominent in sectors like SaaS, logistics, financial services, healthcare among others, but payment gateways are now looking at ways to enable AI........

© Inc42