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New NPCI Directives Set to Enhance UPI Security and Transaction Efficiency
In a bid to bolster the security and efficiency of Unified Payments Interface (UPI) transactions, the National Payments Corporation of India (NPCI) has introduced new directives effective from April 1, 2025. These regulations will impact banks, Payment Service Providers (PSPs), and third-party UPI applications, mandating them to adopt stricter security measures.
The National Payments Corporation of India (NPCI) has recently announced significant updates to the Unified Payments Interface (UPI) aimed at improving transaction security and efficiency. Effective from April 1, 2025, these new regulations require banks, payment service providers (PSPs), and popular UPI apps such as PhonePe, Google Pay (GPay), and Paytm to implement stringent security measures regarding UPI IDs. This measure comes in response to rising concerns over fraudulent activities within the UPI ecosystem.
Key Changes in UPI Regulations
The NPCI’s updates focus on enhancing the reliability of UPI transactions. Below are the significant changes that stakeholders must adhere to:
- Regular Database Updates: Banks and PSP applications are mandated to consistently refresh their databases using the Mobile Number Revocation List (MNRL) and the Digital Intelligence Platform (DIP) at least once a week.
- Deactivation of Inactive UPI IDs: UPI IDs linked to mobile numbers that become inactive will be deactivated to prevent transaction errors.
- Limitations on ‘Collect Payments’ Feature: This feature will now be restricted to verified large merchants, with person-to-person collect payments capped at ₹2,000.
Regular Updates to Prevent Errors
As per the NPCI’s directive, regular updates using the Mobile Number Revocation List (MNRL) and the Digital Intelligence Platform (DIP) aim to prevent transaction errors stemming from outdated or reassigned mobile numbers. This measure will be mandatory for all banks and PSP applications.
Mobile Numbers and UPI Deactivation
The new rules are particularly aligned with guidelines set forth by the Department of Telecommunications (DoT). Notably, a mobile number that has been disconnected can be reassigned after a period of 90 days. If a user refrains from calls, texts, or data usage for three months, their number may be deactivated and assigned to a different user. Consequently, this principle applies to UPI IDs linked to inactive mobile numbers, which will also be deactivated, urging users to keep their registered mobile numbers active to avoid transaction disruptions.
Restrictions on ‘Collect Payments’ Feature
In an effort to combat fraudulent transactions, the NPCI is implementing changes to the “Collect Payments” feature of the UPI system. According to a report from The Economic Times, this feature will now be limited to verified larger merchants. Additionally, person-to-person collect payments will see a cap of ₹2,000 to mitigate the risks associated with fraudulent activities.
These new directives are anticipated to strengthen the security framework surrounding UPI transactions, while also providing a seamless transaction experience for users. By implementing such measures, NPCI aims to minimize fraud risks and enhance overall transaction security within the UPI ecosystem.
Conclusion
The NPCI’s new directives mark a crucial step forward in safeguarding UPI transactions against the backdrop of increasing digital payment fraud. As these changes take effect on April 1, 2025, it becomes imperative for banks, PSPs, and users to adapt to these regulations for a safer and more efficient payment environment. Keeping mobile numbers active and adhering to updated security protocols will ensure smooth processing of transactions and a robust UPI ecosystem.
As digital transactions continue to rise, these measures are not just necessary; they are essential for fostering trust in digital payment platforms. Embracing these changes is vital for the continued growth and success of UPI in India’s evolving financial landscape.
Keywords
NPCI, UPI security measures, UPI transaction efficiency, Mobile Number Revocation List MNRL, Digital Intelligence Platform DIP, UPI ID deactivation, UPI regulations 2025, digital payment fraud, collect payments feature restrictions, enhancing UPI security.
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