NPCI To Block Certain UPI Transactions, Starting February 1

In a recently published directive, the National Payments Corporation of India (NPCI) announced that all Unified Payments Interface (UPI) transaction IDs involving special characters will be declined, effective February 1.

The move comes as the retail payments operator is aiming to enhance uniformity across all UPI transactions, which has emerged as the backbone of India's digital financial movement, since demonetisation in 2016.

Alphanumeric IDs Are In Line With UPI Technical Specifications

On January 9, the NPCI published a circular advising UPI ecosystem participants to use only alphanumeric characters for generating UPI transaction ID in order to ensure compliance with UPI technical specifications.

Despite addressing the issue largely, the NPCI noted that certain participants continue to be non-compliant with the technical specifications.

However, keeping in view the criticality of the situation, the NPCI has decided to strictly enforce the decision to block any transaction ID containing special characters.

The NPCI has further urged all the participating entities to take immediate action to ensure compliance.

The Rise Of UPI Transactions

In 2016, UPI was developed by the NPCI as India's instant payment system, facilitating inter-bank peer-to-peer as well as person-to-merchant transactions. Since then, it has been widely used across the nation and its popularity further gained momentum during the COVID-19 pandemic period as digital transactions became a more convenient part of life.

As per the NPCI data, the UPI transactions reached an all-time high with 16.73 billion in transactions worth Rs 23.24 lakh crore in December 2024, marking a significant rise compared to 12.02 billion in transactions worth Rs 18.23 lakh crore in December 2023.

NPCI's Response To Jumped Deposit Scam Reports

With the increase in digital transactions, the financial scams have also grown. Several media reports warned public about the 'Jumped Deposit Scam', under which fraudsters send a small token of money to UPI users and then make unsolicited requests to authorise deposits of larger amounts. Upon receiving the deposit, the UPI user enters their personal identification number to check their bank balance. During this, the UPI user unknowingly approves the fraudulent request of the scammer, leading to a loss of money.

Responding to the reports, the NPCI reassured the public that no such instances of cyber fraud have been identified on the UPI platform, emphasizing that the transactions are supported by robust safety protocols and strict regulatory measures.

The NPCI noted that inaccurate and technical discrepancies in the media reports regarding the Jumped Deposit scam has created unnecessary panic among the general public.

The NPCI further explained that simply opening a UPI or bank application does not automatically approve a transaction as the user must explicitly click on 'pay' option after entering their PIN details to approve a transaction, otherwise the transaction will not be completed.

Moreover, UPI is a device-based payment system, linking the user's payment account securely with their registered mobile number and specific mobile phone. It can not be randomly accessed by any external party. Only the user is entitled to initiate any transactions, the central body maintained.