Be Aware of UPI Frauds: 1.4 Lakh UPI Frauds Reported In Q1, Q2 2022

A total of 1,46,495 unified payments interface (UPI) fraudulent activities were reported on the National Cybercrime Reporting Portal (NCRP) during the first and second quarters of 2022, as per the Ministry of Home Affairs (MHA).  

Reportedly, MHA said UPI frauds increased by 15.3% between the first (Q1) and second quarters (Q2) of 2022. 

There were 62,350 UPI-related frauds reported on NCRP in Q1 2022. Whereas in Q2 2022, there were 84,145 UPI-related complaints.

The ministry informed that during Q1 and Q2 2022, UPI frauds rose by 34% as compared to other cybercrimes including debit and credit card-related frauds and internet banking-related frauds reported by NCRP. 

In Q1 2022, debit and credit card, and sim swap frauds increased to 24,270 from 26,793 complaints in Q2 2022. 

On the other hand, internet banking cyber complaints decreased from 20,443 in Q1 2022 to 19,267 in Q2 2022.

“Online financial fraud, a cyber crime category under NCRP is the most prevalent among others, as 67.9 % of the total reported cyber crime were online financial frauds,” the ministry said.

Meanwhile, according to the central bank RBI, UPI transactions increased by 1200% in the fiscal year ending September 2022.

The development comes after Inc42 reported that UPI clocked 678 Cr transactions in September 2022 and 657 Cr transactions in the previous month (August). With this, its transaction volume rose by 4% month-on-month (MoM) thus, crossing the INR 11.16 Lakh mark.

Earlier in October, the Centre announced that Oman would begin using Indian payment solutions viz UPI and RuPay credit and debit cards. As part of the deal, the National Payments Corporation of India (NPCI) and the Central Bank of Oman (CBO) inked an agreement to collaborate in the fintech and payment sector. 

Besides, a slew of countries including Singapore, Malaysia, Thailand, Philippines, Vietnam, France, Russia, Taiwan, South Korea and Japan (in partnership with Liquid Group), among others are currently using the UPI or in the process of deploying it within their payment ecosystem. 

The UPI ecosystem must be sustainable in order to grow: Google Pay

Mumbai/ Bengaluru: Google Pay has been ramping up its India presence with the launch of new services to take on peers PhonePe and Paytm in the fast-growing digital payments market. Unified Payments Interface (UPI) transactions on Google Pay have grown by almost 22% in the past three months to gain nearly 34% of the market share, second only to arch rival PhonePe.

In an interaction with Mint, Ambarish Kenghe, vice-president, product management, Google Pay, shares his views on the National Payments Corporation of India’s move to cap the market share of UPI apps to 30%, investments in payment infrastructure and new areas of growth. Edited excerpts:

Google Pay has voiced its concerns over UPI market cap. What have you been relaying to NPCI? Also, what is your take on zero merchant discount rates (MDR)?

On market cap, we have always stood for competition. And, it’s very early, so we want to make sure there is enough competition and that’s a good thing.

On the question of sustainability, I definitely think that we need to make the (UPI) ecosystem sustainable. There are various ways, and I think it’s hard to say whether MDR is the right way of doing it or if there are other means.

India has always innovated and leapfrogged. So, I do not know whether we will evolve with MDR, or in any other way. But we need to make it (UPI) more sustainable and find ways as we want to figure this out. (MDR is the percentage charged to merchants by payments firms for processing digital payments).

Will you be bringing down your market share to meet NPCI norms?

The way it (market cap) is designed, there is time before it applies. It is the Indian rules we play by. So, right now there is a plan being put in place, where we work with NCPI and others once the market cap kicks in. The piece we are concerned about is that once it (market cap) gets applied, users should not be impacted. That is Google Pay’s biggest concern. So, we are working with the ecosystem. (Last November, NPCI, which operates UPI, decided to impose a market cap, where payments firms can process a maximum of 30% of UPI transaction volumes in the preceding three months.)

Differences between UPI and Digital Rupee

  1. In UPI, the banks act as a gateway or a channel for payments, but when it comes to the digital rupee, the payments are done from one wallet to another. Here, banks don’t get involved, but it’s otherwise in the UPI. 
  2. UPI payments are made via sources like Google Pay, PhonePe, NEFT, and RTGS, etc. In the digital rupee, the payments are done electronically.
  3. Settlements can be done immediately by using the digital rupee and they possess a store of value. But UPIs don’t do that as they are merely an infrastructure made to process the payments. 
  4. In UPIs, you can’t withdraw the funds and store them in your wallet for future use. However, that’s absolutely possible in the digital rupee, making it a one-stop solution for all sorts of payments, both online and offline.
  5. The UPI payment system works similarly to debit cards and credit cards, whereas, the digital rupee is like a “cash form” where one can withdraw and spend or can store it like a deposit in their wallet.
  6. Payments made via UPI involve middlemen, hence the indirect route of transferring money. In digital rupee, the payment is done directly, and there’s no middlemen involved here.

Up to Rs 10,000 in UPI transactions will now be covered by insurance thanks to Paytm and HDFC ERGO.

One97 Communications-owned Paytm has launched a group insurance plan in partnership with HDFC ERGO General Insurance. The plan, which is called Paytm Payment Protect, will insure transactions made through UPI across all payment wallets and apps. 
Paytm users can insure transactions upto Rs 10,000 by paying Rs 30 and more per annum. In addition, insurance cover for transactions costing Rs 1 lakh or above will get added on in the times to come.
The fintech company also highlighted that this plan will increase the trust of the users, enhance their digital payments experience and accelerate its adoption across the country. 
According to Paytm’s Bhavesh Gupta, who is the CEO of Lending and Head of Payments, this move is meant to safeguard users and fight cybercrimes. Echoing Gupta’s point, Parthanil Ghosh, President at HDFC ERGO General Insurance’s retail business, said that while UPI and wallet payments provide ease and convenience, it makes the users susceptible to cybercrimes. 
“We are excited to partner with Paytm as this asserts our pledge to provide innovative solutions to mitigate cyber risks in today’s digital era. Our comprehensive insurance offering, coupled with Paytm’s digital access, will boost digital growth and ensure financial inclusion along with protection from cyber frauds across the country,” he said.
To avail this option, users can search for the ‘Payment Protect’ option on the Paytm app. Thereafter, they can enter their name, mobile number and tap on the ‘Proceed to Pay’ button. They can also visit the HDFC ERGO website for a detailed run-through of the policies, terms and conditions, and more.

A few days back, Paytm announced Bijlee Days for all the users who pay their electricity bills from the app. The digital payments service provider said that it would be offering 100 per cent cash back and additional rewards to its users who will be making payments for electricity bills between the 10-15th of every month.