The government is actively exploring the implementation of a minimum time requirement for transactions exceeding a specific amount, particularly for initial interactions between two individuals. This initiative aims to combat the escalating incidents of online payment fraud.
According to sources cited by The Indian Express, government officials are considering a potential four-hour window for the processing of the first digital payment transactions, specifically those exceeding Rs 2,000.
While acknowledging that such a measure may introduce some friction to digital payments, officials assert its necessity to address growing cybersecurity concerns. If implemented, this regulatory approach is expected to encompass various digital payment methods, including Immediate Payment Service (IMPS), Real-Time Gross Settlement (RTGS), and Unified Payments Interface (UPI).
It’s crucial to note that the proposal goes beyond merely delaying or limiting the first transaction upon account creation, as is currently practised across various digital payment platforms. Instead, it seeks to regulate every initial transaction between two users, irrespective of their individual transaction history.
Also read: NPCI issues Transaction limit for Linked RuPay Credit Card on UPI
For example, current protocols allow a user to send a maximum of Rs 5,000 within the first 24 hours of creating a new UPI account. Similarly, with National Electronic Funds Transfer (NEFT), up to Rs 50,000 (in full or parts) can be transferred within the initial 24 hours post-beneficiary activation.
Under the proposed plan, a four-hour time limit would apply each time a user initiates their first payment exceeding Rs 2,000 to another user with no prior transaction history in digital/UPI payment. This matter is expected to be deliberated in an upcoming meeting involving government officials, industry stakeholders, the Reserve Bank of India, various public and private sector banks, as well as tech companies like Google and Razorpay.
Recently the NPCI has issued a circular directing various payment apps such as Google Pay, PhonePe, Paytm, and others to deactivate the UPIs which are not active for the past 1 year by December 31, 2023. The move aims to streamline and optimise the usage of UPI IDs, ensuring that only actively utilised ones remain operational. The directive serves as a proactive step to enhance the efficiency and security of the UPI ecosystem.
Read More: NPCI Instructs Payment Apps to Deactivate Inactive UPI IDs by December 31, 2023
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