Two major updates for UPI users! Will a charge apply to transactions exceeding ₹2,000? A new security alert is also on the way..

While UPI (Unified Payments Interface) has made transactions incredibly easy in India, scammers have devised equally innovative ways to commit fraud. However, online fraudsters may soon find themselves in trouble. According to reports, the country's major banks have prepared a crucial and stringent proposal to crack down on digital payment fraud.

Under this proposal, when a customer initiates a 'high-risk'—or suspicious—UPI transaction, the option to enter the PIN will not appear immediately. Instead, a 'Yes/No' alert prompt will first flash on the screen.

What is the banks' 'Yes/No' proposal?
Currently, when making a UPI payment, the page to enter the UPI PIN opens immediately after the amount is entered. Scammers exploit this haste.
According to the new proposal, if the bank's system flags a transaction as 'suspicious,' an alert message will pop up on the user's screen just before the funds are debited. This message will ask, "Do you really want to send this amount to this person?" Below this, there will be two prominent options: 'Yes' and 'No'.

Will charges apply to UPI transactions exceeding ₹2,000?
Union Finance Minister Nirmala Sitharaman introduced the 'Taxation and Other Laws (Amendment) Bill' in Parliament on Tuesday, August 4. The bill aims to lift the existing ban on imposing MDR (Merchant Discount Rate) on notified electronic payment modes for banks and payment service providers.

Under this provision, a nominal fee ranging from 0.25% to 0.4% could be levied on merchant transactions exceeding ₹2,000, while person-to-person transactions will remain exempt from this charge. According to a Reuters report, officials are still deliberating on how to implement this charge; no final decision has been reached regarding the rate or the specific transactions to which it will apply.

How will a transaction be classified as 'high-risk'?
This prompt will not appear for every payment, ensuring that the speed and convenience of UPI remain intact. Banks will utilize AI (Artificial Intelligence) and machine learning to identify risks. A transaction will be deemed high-risk under the following conditions:

1. If you are transferring a large sum for the first time to an account with a suspicious history.
2. If you typically make payments of ₹500–₹1,000, but a transaction of ₹50,000 is suddenly initiated from your phone.
3. If a payment occurs at 2 AM or at a time that deviates significantly from your usual transaction patterns.
4. If your phone suddenly issues a command for a large payment from a different location or city.

Why was this rule necessary?
Scammers are currently draining people's accounts using tactics such as screen-sharing apps, OLX fraud, lottery scams, or tricks like asking users to "enter a PIN to receive money." Often, people enter their PIN in haste without checking the recipient's name. This 'Yes/No' prompt will act as a 'speed breaker' or a 'cooling-off period,' giving the user a moment to pause, think, and double-check the payee's name.

Banks have submitted this proposal to the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI) for consideration. If approved, this feature will soon be rolled out across Google Pay, PhonePe, Paytm, and the banks' own applications.

Disclaimer: This content has been sourced and edited from Dainik Jagran. 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.