The National Payments Corporation of India (NPCI), the backbone of the country’s digital payments ecosystem, is stepping up to address a rapid rise in payment frauds. In response to escalating risks, the organization is deploying a mix of artificial intelligence, transaction policy changes, and user protection measures to safeguard users and preserve trust in digital payments.
AI-Driven Risk Scoring & Real-Time Monitoring
To better detect suspicious patterns, NPCI has started piloting AI and machine learning models that assign risk scores to UPI accounts and transactions. By analysing transaction history, device data, and behavioral signals, these models help flag potentially fraudulent activity in real time. Banks receive alerts, and NPCI retains discretion to block or reject high-risk transactions. This federated scoring system combines insights from both NPCI and individual banks to reduce false positives and improve overall accuracy.
Phasing Out Pull Transactions
One of the biggest policy shifts is the decision to eliminate “pull” methods—payment requests initiated by a recipient (“collect” or “request money”)—from November 1. NPCI identified pull transactions as a key vector for fraudsters, who often trick users into authorizing requests under false pretenses. The move shifts attention firmly to “push” transactions, where the payer retains full control over initiation and authorization, reducing one major channel of abuse.
Greater Transparency in Beneficiary Identity
A new rule effective June 30, 2025, mandates that senders can view the actual identity of UPI beneficiaries before confirming transactions. This transparency is expected to curb impersonation scams and deter payments to dubious recipients. The change aims to make users more confident and cautious before authorizing payment flows.
User Awareness & Advisory Campaigns
NPCI is also intensifying outreach to educate users about common fraud tactics. Advisories now warn of coercive tactics—such as calls from self-proclaimed “officials,” claims of legal trouble, or demands for “security deposits”—used to trick individuals into transferring money. Users are urged to verify requests independently, avoid sharing sensitive credentials, and report suspicious calls or UPI IDs. NPCI also encourages documenting such exchanges to aid investigations.
Challenges & Outlook
Though technical and policy reforms mark a robust response, challenges remain. Fraudsters are adept at evolving tactics, and AI models, while powerful, are not foolproof. Ensuring coordination among banks with varying data maturity and preserving user convenience will be critical. Moreover, ensuring that rightful transactions aren’t mistakenly blocked (false positives) remains a priority.
Still, NPCI’s multi-pronged approach—combining smarter screening, structural reforms, and user education—signals a more proactive posture in defending India’s digital payments against fraud. As digital transactions continue to grow, such safeguards may determine whether trust holds or cracks under pressure.