New UPI Rule: The way UPI payments work is set to change; the RBI is preparing a major plan to curb online fraud..

The use of UPI and other digital payment methods has surged in India. Today, people can transfer money to any account within seconds. However, the rise in digital payments has been accompanied by a rapid increase in online fraud cases. People are being swindled through methods such as fraudulent calls, investment scams, and deepfakes.

In light of these rising incidents, the RBI is considering new security measures. Meanwhile, banks want to enhance security without compromising the user experience. Consequently, they have submitted several proposals to the RBI:

1. No mandatory delay for every transaction
Banks argue that imposing a one-hour delay on every online transaction would inconvenience users and potentially reduce the adoption of digital payments. Instead, they propose implementing stricter checks only in specific instances. Under this proposal, standard transactions would proceed with instant transfers as usual, while additional confirmation would be required only if the system flags a transaction as suspicious.

2. ‘Yes’ or ‘No’ option

Banks have suggested displaying a prompt on the mobile app for suspicious transactions, asking the user if they genuinely intend to send the money.
Selecting ‘Yes’ would result in an immediate transfer.

Selecting ‘No’ would cancel the transaction.
If no response is provided, the transaction could be processed after a delay of approximately one hour.

This approach would give users a moment to reconsider if they are sending money under fraudulent circumstances.

Which transactions will be scrutinized?
This process would not apply to every payment; banks intend to trigger alerts only for unusual transactions, such as:

Transferring a large sum late at night.
Transferring money to a new account for the first time.
Sending money to a recently opened bank account.
Suspicious transactions amounting to ₹10,000 or more. Some banks believe that this limit could be raised to ₹20,000–₹25,000 in the future.

**Proposal | What would be the impact? ****

**RBI's Plan:** Work is underway on new regulations to make online payments more secure.

**Banks' Suggestion:** Avoid delays in every transaction; seek confirmation (Yes/No) only when necessary.

**NPCI's View:** Excessive restrictions could hinder the usage and growth of digital payments.

**How ​​do frauds occur?**
In most cases, people fall victim to scams and transfer the money themselves.

**Focus:** Making online payments more secure while maintaining their existing ease of use.

**How ​​rapidly has online fraud increased?**
Incidents of cyber fraud have surged alongside the rise in digital payments. While approximately 2.6 lakh fraud cases were reported in 2021—resulting in losses of ₹551 crore—this figure climbed to 28 lakh cases by 2025. During this period, the total amount lost to fraud also rose to ₹22,931 crore, highlighting the severity of the growing cyber fraud associated with online payments.

In most instances, fraudsters deceive people via phone calls, messages, fake investment schemes, or deepfake videos, tricking them into transferring money themselves. Such incidents are known as "Authorized Push Payment" (APP) fraud because the victim personally initiates the transaction.

**What is the stance of the NPCI and RBI?**
The NPCI believes that imposing too many hurdles on online payments could reduce user convenience and slow down the adoption of digital payments. Additionally, since many small shopkeepers accept payments via QR codes linked to their personal savings accounts, new regulations could impact them as well.

The RBI is currently evaluating all these proposals. It is expected that future regulations will aim to curb online fraud without causing undue inconvenience to the general public when making digital payments.

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