NPCI's Directive to Curb UPI Fraud

The National Payments Corporation of India (NPCI) has issued a groundbreaking directive to halt all peer-to-peer (P2P) 'collect requests' on the Unified Payments Interface (UPI) starting October 1, 2025. This initiative aims to significantly reduce financial fraud across digital platforms.

Implementation Details

In a recent circular, NPCI has instructed all member banks, Payment Service Providers (PSPs), and UPI applications to ensure no P2P collect transactions are processed beyond the stipulated deadline. This includes popular apps like PhonePe, Google Pay, and Paytm.

Impact on Users and Fraud Prevention

By eliminating P2P collect requests, UPI enhances its security framework, transitioning to a payer-initiated transaction model. This change empowers users with greater control over their transactions, requiring them to scan QR codes for payments, thereby minimizing fraud risks.

Industry experts, including Rahul Jain of NTT DATA Payment Services India and Reeju Datta of Cashfree Payments, commend NPCI's decision. They highlight the move's potential to close loopholes exploited in scams, fostering a safer digital economy through increased transparency and consumer trust.