Summary of the Key Points in Plain Language
This article discusses a major transformation occurring in the payment industry: For decades, the global financial system has relied on the KYC (Know Your Customer) rules to track the flow of all funds, as it was possible to trace every payment back to a specific, accountable individual. However, with the increasing popularity of AI agents that can independently compare prices, place orders, book tickets, and even make investments, the existing rules are no longer sufficient. In September 2026, the National Payments Company of India, Visa, Mastercard, and Ant Group simultaneously announced plans to establish a new identity verification system called KYA (Know Your Agent) for AI agents. The industry quickly realized that simply providing an “identity card” for AI agents is not enough; instead, the entire payment system needs to restructure its underlying logic of trust, shifting from verifying who is making the payment to ensuring that each transaction truly reflects the user's intentions. This is essentially building a new infrastructure for the flow of funds in the AI era.
---
Detailed Explanation of the Key Points
1. Why the sudden emergence of KYA? The old KYC system can no longer manage AI-based payments
The underlying logic of the financial system was simple: all fund movements could be traced back to a real person, and the payment was confirmed by that person. Therefore, the system only needed to verify who was behind the account, making risk control relatively easy.
However, AI agents break this chain. For example, if you authorize an AI to automatically purchase household items for you, with a limit of $100 per transaction and a monthly budget of $500, the AI might place multiple orders for soy sauce, toilet paper, and laundry detergent within a week. You wouldn’t be able to confirm each transaction manually. In this case, the AI is making the payment, not you. If the AI’s instructions are compromised and the money is transferred to a gaming account, you would have no way of protecting yourself.
India’s initiative is not trivial: its UPI payment system handled 24.5 billion transactions in August 2026, averaging nearly two transactions per person nationwide. Such a large volume of daily transactions requires new rules to accommodate AI-based payments.
2. Global payment giants are collectively implementing KYA; it’s not just about adding a small feature, but about providing a “user ID” for AI
Many think KYA is just about giving AI an electronic ID, but it’s much more significant. Visa, Mastercard, and Ant Group, which are usually competitors in the payment market, are now working together to establish unified KYA standards. This is like mobile, telecommunications, and cable companies suddenly agreeing that all phone numbers’ information can be cross-operator checked and used universally.
This indicates a consensus in the industry: AI will soon become the primary entity for making payments, just like phone accounts do today. If each company uses its own authentication rules, an AI authenticated by one platform might not be able to make payments on another. Scammers could easily create fake AI agents to commit fraud across platforms, leading to chaos in the global payment system. The goal of KYA is to create a universal profile for AI agents that includes information about who developed them, who granted them payment permissions, and what they are allowed to do. All payment systems will be able to instantly recognize these AI agents, whether they use bank cards, digital wallets, or UPI.
3. The most disruptive issue: Even with a legal ID, AI can still make mistakes, and traditional risk controls are ineffective
People wonder how AI, with a verified identity and user authorization, could make mistakes. For instance, if you authorize an AI to buy a flight to Shanghai for $2000 on Friday, but the AI mistakenly buys a ticket for next Friday or chooses a far-off airport, or if you cancel the trip, the AI may still proceed with the purchase. In the past, such errors would be prevented by account theft or user input errors. However, in the AI era, the risk is that the AI’s intentions may not match its capabilities, even though its identity is legitimate. For example, if you hire a nanny with a health certificate and ask her to buy soy sauce, but she buys vinegar instead, the existing rules would be unable to handle such situations.
4. KYA is just the beginning of a new era of trust: Even trustworthy AI must be verified for each transaction
The industry recognizes that relying solely on a static ID is insufficient. The traditional “once authenticated, permanently trusted” approach must be replaced with real-time verification for each payment. This means checking the original task given to the AI, the transaction amount and recipient, the time, and whether external conditions have changed since the authorization was granted. It’s like entering a building with an ID, but the security guard still checks whether the card matches the door and whether you have the permission to enter. An AI that was authorized to buy laundry detergent at 10 a.m. might lose that permission if the user changes its task at 10:05 a.m.
5. Two real benefits for ordinary people with this new system
First, there will be no more disputes over AI-made mistakes in payments. If an AI makes a mistake, no one can shirk responsibility. Every step of the payment process will leave an immutable record, allowing for quick identification of the responsible party. Second, this will bring many convenient features: AI will automatically compare prices, book hotels, and make payments for you, freeing you from manual tasks. You can set profit and loss limits for your investments, and the AI will handle the transactions for you, making it possible to use automated, low-value, and frequent payments without constant monitoring.
In summary, the payment industry is transitioning to a new era where AI agents must be verified for each transaction, regardless of their reliability. This will not only reduce disputes but also bring numerous conveniences, such as automated travel arrangements and investment management.