Spotlight on India’s UPI

India’s Unified Payments Interface (UPI) scheme was introduced on top of Immediate Payment Service (IMPS) to increase adoption by adding features such as payment initiation through third-party service providers and alias addressing. UPI is considered a public good and has mandated no charge for person-to-person transfers.

UPI scheme rules and India’s regulations set detailed and prescriptive requirements for DFSPs on various elements of fraud risk management, including end user authentication, fraudulent transaction reporting, and dispute mechanisms.

What’s Notable Related to Fraud Mitigation?

UPI rules include prescriptive requirements with respect to end user authentication and identification. For example, for request-to-pay messages, DFSP must decline transactions where the receiver identity is masked. To prevent SIM swap fraud, rules prescribe strict guidelines around end user changes in mobile numbers. Lastly, rules articulate additional DFSP fraud control recommendations, like velocity checks.

The controls required by the scheme contribute to raising the bar on DFSPs’ risk management.

India, through both UPI scheme rules and general consumer protection regulations, requires DFSPs to provide transaction notifications and multiple complaints channels that enable the reporting of suspected fraudulent transactions. For disputes of reported fraudulent transactions, UPI scheme rules provide detailed steps to determine liability with an NPCI panel to address unresolved disputes between DFSPs. An Ombudsman appellate authority at the Reserve Bank of India (RBI) provides another resolution body in case disputes require it.

Complaint and dispute mechanisms provide necessary fraud corrective measures.

Next Topic in this Section: Spotlight on Ghana’s GIP