In an effort to curb the rising number of frauds pertaining to digital payment mode?UPI, the Indian government is planning to implement a?new rule?soon.
The government is?planning to introduce a minimum time for a transaction beyond a particular amount happening for the first time between two people. The plan likely includes a possible?four-hour window?for the first transaction between two users for digital payments being processed for all?transactions likely above Rs 2,000, according to government officials, as per?the Indian Express report.?
In that window,?the?UPI?user will have?four hours to reverse or modify payments?they made to someone for the first time.
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While the process is expected to add some friction to digital payments,?officials are of the view that it is necessary to mitigate cybersecurity concerns. If finalised, the measure could?cover a wide range of digital payments through the Immediate Payment Service (IMPS), Real-Time Gross Settlement (RTGS), and even the Unified Payments Interface (UPI).
Keep in mind that the plan is not to just delay or limit the first transaction upon account creation, which already happens in some shape or form across most digital payment means, but to regulate every first transaction between two users, irrespective of their independent past transaction histories.
For instance, currently, when a user creates a new?UPI?account, they can send a maximum of Rs 5,000 in the first 24 hours. Similarly, in the case of the National Electronic Funds Transfer (NEFT), post-activation of a beneficiary, Rs 50,000 (in full or in part) can be transferred in the first 24 hours, as per the report.
But, according to the plan on the table, a?time limit of four hours will apply every time a user makes the first payment over Rs 2,000 to another user?they have never transacted with before.
¡°We are looking to add a time limit of four hours for first-time digital transactions over Rs 2,000.?The discussion will be taken up during a meeting with government and industry stakeholders, including the Reserve Bank of India, various public and private sector banks, and tech companies like Google and Razorpay,¡±?a senior government official said, requesting anonymity.
¡°Basically, how it will work is that you will have four hours after making a payment to someone for the first time?to reverse or modify the payment. It will be along the lines of NEFT (National Electronic Funds Transfer), where the transaction happens within a few hours. Initially, we did not want to have any amount limit thresholds, but through informal discussions with the industry, we realised it could impact small-scale buying like groceries, etc., so we are planning to give leeway to transactions under Rs 2,000,¡±?the official added, as per the report.
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Banks witnessed the maximum number of frauds in the digital payment category during the financial year 2022-23, according to the RBI Annual Report 2022-23. In FY2023, the total number of fraud cases in the banking system were pegged at 13,530, involving a total amount of Rs 30,252 crore.
Also Read:?How To Reverse?UPI?Payment Mistakenly Made To Wrong ID
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