Major changes likely for UPI payments; more clicks required! RBI may implement a new rule..

The experience of making UPI payments in India could soon change. In the near future, not every payment will be completed with just a single tap. To curb rising digital fraud, banks have proposed a new security feature. Under this system, if a bank's mechanism flags a UPI transaction as suspicious, the user will be asked for an additional confirmation before the payment is finalized. This proposal has been submitted to the Reserve Bank of India (RBI), which is currently considering new measures to strengthen digital payment security.

**'Yes' or 'No' option for suspicious UPI transactions**

According to reports, banks prefer adopting a risk-based system rather than implementing additional checks for all large transactions. If the bank's fraud detection system identifies a transaction as suspicious, a pop-up will appear on the user's screen asking if they genuinely intend to make the payment. The transaction will proceed only after the user clicks "Yes." This extra confirmation step will not apply to every UPI payment; it will only be triggered for transactions that the bank's system deems risky or unusual.

**Why do banks want to introduce this change?**

There has been a sharp rise in UPI-related online fraud cases recently. Most of these incidents involve social engineering rather than hacking. Fraudsters use phone calls, messages, or fake customer care numbers to trick people into transferring money immediately. Since UPI payments are instantaneous and difficult to reverse, many victims realize they have been defrauded only after the money has already left their accounts.

Banks believe that introducing a brief confirmation step before suspicious transactions would give users a moment to reconsider, thereby increasing the chances of preventing fraud.

**Banks do not want to delay every payment**

According to reports, banks are not in favor of implementing a mandatory delay or "cooling-off period" for all high-value transactions. They state that UPI's greatest strength lies in its fast and convenient service. Millions of users and merchants rely on instant payments every day; consequently, slowing down transactions could negatively impact both the user experience and business operations. For this reason, banks prefer that additional security measures be implemented only in cases where there is a high risk of fraud.

How will banks identify high-risk transactions?

Banks already utilize advanced risk engines that analyze customer behavior in real-time. The system may flag a transaction as suspicious if it involves an unusually large amount, transfers money to a new recipient for the first time, uses a new device or location, or deviates from established spending patterns.

In such instances, the user might be asked to re-confirm the transaction before it is completed. The RBI is currently considering this recommendation from the banking sector. If approved, a new risk-based security model could be implemented within India's digital payment system. While this would require the average user to perform just one extra click, it could significantly enhance protection against online fraud.

Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.