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The NPCI is keen on promoting ‘push’ transactions, where the customer initiates payment by scanning the QR code or by other means
As per RBI data, digital banking and card fraud cases stood at 13,133 in H1 FY25, with INR 514 Cr lost
P2P payments for ‘collect’ or pull transactions are capped at INR 2,000 per day
The National Payments Corporation of India (NPCI) is reportedly planning to do away with the ‘collect’ request feature for merchant payments in a phased manner to curb the rise in UPI-related fraud cases in the country.
A collect request is initiated by merchants to get funds from customers by using virtual ID. However, such transactions are susceptible to fraud as merchants have greater control over them.
The NPCI is rather keen on promoting ‘push’ transactions, where customers initiate payments by scanning QR codes, using account number, virtual ID, or via other means, the Economic Times reported.
This comes amid growing popularity of UPI payments in the country. UPI transactions in February surpassed 16 Bn and the value surpassed INR 21 Lakh Cr. In 2024, UPI transactions zoomed nearly 46% to a record 172.2 Bn from 117.7 Bn in 2023.
However, alongside this rapid growth, there has been a concomitant rise in scams through UPI. As per the data from the Reserve Bank of India (RBI), the number of digital banking and card fraud cases in the first half of the ongoing fiscal year (H1 FY25) stood at 13,133, with INR 514 Cr lost to these scams.
In the fiscal year 2023-24 (FY24), the number of digital banking scams surpassed 29,000 and their value stood at INR 1,457 Cr.
UPI apps such as Google Pay and PhonePe typically verify the identity of a merchant when the customer initiates a payment, thus chances of fraud are low in push transactions.
On the other hand, there have been numerous instances of collect call transactions being used by fraudsters to lure victims into paying for fake products and services.
While the NPCI is working on phasing out ‘collect call’ for merchant transactions, the peer-to-peer payment limit for such transactions has been capped at INR 2,000 per day, which the report said, is less than 3% of total P2P transactions.
The latest development comes on the heels of a report saying that banks sent a proposal to the Centre for the reintroduction of merchant discount rate (MDR) on transactions made through UPI and RuPay debit cards.
