Loading NewKerala.com...

NPCI in talks to remove 'pull transactions' on UPI to reduce digital frauds

IANS March 18, 2025 109 views

The National Payments Corporation of India (NPCI) is seriously considering eliminating 'pull transactions' on UPI to combat increasing digital fraud. This potential policy shift comes at a time when UPI transactions have skyrocketed, reaching 172.2 billion transactions in 2024. The move could significantly impact how digital payments are processed, potentially reducing fraudulent activities but also raising concerns about transaction efficiency. While discussions are still preliminary, the RBI continues to highlight the critical need for consumer awareness and protection in digital financial ecosystems.

"Most frauds are happening through the pull method" - NPCI Source
Mumbai, March 18: In an effort to curb rising digital frauds, the National Payments Corporation of India (NPCI) is reportedly in early discussions with banks to eliminate 'pull transactions' on the Unified Payments Interface (UPI).

Key Points

1

NPCI considering radical UPI transaction method change

2

Digital fraud cases rising dramatically in India

3

UPI transactions hit record 172.2 billion in 2024

4

RBI emphasizing preventive digital payment awareness

Most frauds are happening through the pull method, and NPCI is exploring the possibility of removing this feature altogether to reduce fraudulent activities.

A 'pull transaction' happens when a merchant sends a payment request to a customer, while a 'push transaction' occurs when a customer directly makes the payment using a QR code or other methods.

By removing 'pull transactions', fraud cases could decline, but some bankers fear that genuine transactions may also be affected, potentially lowering efficiency, according to a report by NDTV Profit.

However, NPCI, which operates retail payment and settlement systems in India, has not commented on this development yet.

The discussions are still at an early stage, and a final decision on implementation has not been made yet, the report said.

This development comes at a time when UPI payments are gaining immense popularity in the country. In February alone, UPI transactions crossed 16 billion, with the total transaction value exceeding Rs 21 lakh crore.

In 2024, UPI transactions surged nearly 46 per cent, reaching a record 172.2 billion, up from 117.7 billion in 2023.

With the increasing number of digital transactions, incidents of cyber fraud have also risen. Fraudsters are using new techniques to deceive people, leading to financial losses and emotional distress.

The Reserve Bank of India (RBI) recently emphasised the importance of preventive awareness initiatives to educate people about these scams.

RBI data shows that complaints regarding digital payments and loans remain a major concern. Between April and June of the current financial year (FY25), the RBI Ombudsman received 14,401 complaints.

In the following quarter, from July to September, 12,744 complaints were recorded. The Financial Stability Report for December 2024 highlighted that issues related to loans and digital payment modes accounted for over 70 per cent of the total complaints in the first half of the 2024-25 financial year.

Tags:
You May Like!