Google Pay is once again pushing the boundaries of digital payments with the launch of its game-changing voice-activated UPI payment feature. As part of its ongoing efforts to simplify and innovate within the digital finance space, Google Pay is introducing a feature that will allow users to make UPI payments simply by speaking. This addition is set to revolutionize how millions of people in India make payments, making the process more intuitive, seamless, and accessible than ever before.

The Convenience of Voice-Activated Payments

Gone are the days when users had to manually enter recipient details, payment amounts, and navigate through various screens in the app. With the new voice-activated feature, all users need to do is speak. Whether you’re sending money to a friend, paying a merchant, or settling a bill, all it takes is a simple voice command like “Pay ₹500 to [Name]” or “Send ₹1000 to [Merchant Name] for groceries.” The AI-powered system will process the transaction instantly, taking the hassle out of manual payment inputs and reducing the risk of errors.

This voice-based technology offers significant convenience, particularly for those on the go. Busy individuals, drivers, and multitaskers can now make payments without needing to stop and interact with their phone’s interface, making the entire experience quicker and more efficient.

Making Payments More Accessible

In a country like India, where literacy rates can vary and many users may not be fully comfortable with typing or navigating digital interfaces, this voice-activated feature offers a new level of accessibility. By allowing transactions to be initiated with simple spoken commands, Google Pay is breaking down barriers for individuals who may face challenges using traditional payment methods. This feature also holds the potential to bring digital finance to rural and underserved populations, ensuring that everyone, regardless of literacy levels or tech-savviness, can participate in the digital economy.

Further enhancing this accessibility, the system will support multiple local languages through its integration with the Government of India’s Bhasini AI project. This will allow users to interact with Google Pay in their native language, ensuring that voice-based transactions are possible for people across different regions and linguistic backgrounds. For instance, a user could simply say “Pay ₹500 for groceries” in Hindi, Tamil, or any other supported language, making it easier to use the app in diverse contexts.

Boosting Security with AI and Machine Learning

Alongside improving user experience, Google Pay is also doubling down on security. The voice-activated payment system leverages artificial intelligence and machine learning to ensure that transactions are safe and accurate. The AI system will verify and authenticate voice commands, ensuring that only authorized users can make payments through their voice. This helps prevent fraudulent transactions and adds an additional layer of security to the payment process.

Moreover, Google’s advanced machine learning algorithms will constantly adapt to understand the user’s voice patterns, accents, and speech nuances, ensuring a high degree of accuracy in voice recognition. This technology will also reduce the likelihood of mistakes or misinterpretations during transactions.

Strengthening Google Pay’s Position in the UPI Market

As of late 2024, Google Pay is one of the leading players in the UPI payment space, holding a 37% market share, just behind PhonePe’s 47.8%. Together, Google Pay and PhonePe dominate the UPI landscape, accounting for more than 80% of the market. This new voice-activated feature is poised to give Google Pay an even greater advantage, attracting more users and further cementing its position as a top choice for UPI transactions.

The integration of voice technology into Google Pay could also lead to increased adoption of digital payments among the wider Indian population, including those who may not have been as familiar with app-based payments. For people who already rely on UPI for their transactions, this new feature offers an extra layer of convenience and modernity, making it even more appealing.

The Future of Digital Payments

This voice-activated UPI payment feature marks just the beginning of what could be a transformative shift in how digital payments are made in India and beyond. As Google continues to invest in AI, machine learning, and voice recognition technologies, we can expect more advanced and user-friendly payment solutions to emerge. Whether it’s enhancing the safety of online transactions or enabling users to pay in their local language, Google Pay is determined to stay at the forefront of innovation in the digital payment space.

In conclusion, Google Pay’s voice-activated UPI payments are set to make digital transactions easier, faster, and more inclusive. With a focus on accessibility, security, and user experience, this feature has the potential to not only revolutionize how people make payments but also drive the adoption of digital payments in India’s rapidly growing economy. Get ready for a smarter, safer, and more convenient way to make payments with Google Pay—your voice is all you need.

Millions of Google Pay users are about to experience a major upgrade with the introduction of a new AI-powered feature. Soon, users will be able to make UPI payments using just their voice, making transactions faster and more accessible. The company has confirmed that the development of this feature is already underway and expected to roll out soon.

Sharath Bulusu, Lead Product Manager for Google Pay in India, highlighted that this voice functionality will significantly simplify the payment process for users. However, specific details about how the feature will work are still under wraps. This new addition is expected to be a game changer, especially for those who regularly rely on UPI for their digital transactions.

A Transformative Voice Feature

The introduction of voice-activated payments in Google Pay is set to be a breakthrough, particularly for people who may face literacy challenges. With this feature, users will be able to complete transactions entirely through voice commands. Additionally, Google is working closely with the Government of India on the Bhasini AI project, which aims to make payments more accessible in local languages. Google’s ongoing investment in machine learning and AI technologies also promises to address the growing issue of cyber fraud in India, ensuring safer online payments.

Google Pay’s Dominance in the Market

In India, Google Pay and PhonePe are the two dominant players in the UPI payment space. As of November 2024, Google Pay holds a 37 percent share of the total UPI transactions, while PhonePe leads with 47.8 percent. Together, these two platforms make up over 80 percent of the UPI market. With the upcoming launch of the voice command feature, Google Pay is poised to attract even more users, strengthening its position as a leader in the digital payments sector.

Karnataka Bank Ltd, a leading private sector lender, has reported suspicious cross-border Unified Payments Interface (UPI) transactions amounting to ₹18.87 crore to the Reserve Bank of India (RBI). The bank identified these transactions as unusual and flagged them for further investigation by regulatory authorities.

Details of the Transactions

According to sources, these transactions involved fund transfers through UPI to international accounts, raising concerns over potential misuse of the digital payment system. Karnataka Bank, adhering to its internal monitoring protocols, detected anomalies in these transactions and promptly escalated the matter to the RBI as part of its compliance obligations.

Regulatory Scrutiny and Actions

The RBI is expected to conduct a detailed probe into the nature of these cross-border transactions to determine whether they involve fraud, money laundering, or other financial irregularities. Regulatory authorities may also seek inputs from law enforcement agencies to examine if these transactions have links to any illicit activities.

Karnataka Bank has assured that it is fully cooperating with the regulators and has taken preventive measures to strengthen its internal monitoring mechanisms. The bank is also working closely with financial intelligence units to analyze transaction patterns and identify any potential loopholes in the system.

Growing Concerns Over Digital Payment Security

With the rapid expansion of UPI-based transactions, concerns over security and fraud prevention have become more pressing. While UPI has revolutionized digital payments in India, cases of unauthorized transactions, cyber fraud, and financial crime have also increased. Regulatory bodies, including the RBI, have been taking steps to introduce stricter compliance norms and enhance the security framework for digital payments.

Conclusion

Karnataka Bank’s proactive reporting of suspicious UPI transactions reflects the increasing focus on transparency and compliance in the banking sector. As the investigation unfolds, further clarity on the nature and impact of these transactions will emerge. Meanwhile, banks and regulators continue to emphasize the importance of secure and responsible use of digital payment platforms to safeguard the financial ecosystem.

The National Payments Corporation of India (NPCI), which regulates UPI transactions in India, has announced changes aimed at improving the chargeback process. These changes, set to take effect from February 15, focus on automating the acceptance and rejection of chargebacks, reducing manual intervention, and ensuring smoother dispute resolution.

What’s Changing?

Currently, when a chargeback is raised, it requires manual verification and processing by banks, leading to delays, errors, and potential penalties. NPCI is now automating the process by introducing a system where chargebacks will be automatically accepted or rejected based on Transaction Credit Confirmation (TCC) and return data provided by the beneficiary bank.

Under this new system:

• The beneficiary bank must raise a TCC or a return after the chargeback is initiated.
• Based on this, the system will automatically determine whether the chargeback should be accepted or rejected.
• This eliminates the need for banks to manually review every chargeback, making the process faster and more efficient.

This automation will be applied only to bulk chargeback processing and the Unified Dispute and Issue Resolution (UDIR) system. However, these changes will not be visible to customers through banking apps and will be handled internally by financial institutions.

What Are Chargebacks?

A chargeback occurs when a UPI transaction, initially deemed successful, is reversed by the issuing bank, acquiring bank, or NPCI before the recipient’s bank fully processes it. Chargebacks are typically initiated when there is a dispute regarding a transaction.

When Do Chargebacks Occur?

Chargebacks can be triggered under the following circumstances:

1. Unrecognized Transactions – A customer does not recall or recognize a transaction on their account.
2. Disputed Transactions – A customer raises a complaint about a payment with their bank.
3. Non-Delivery of Goods/Services – A customer is charged for an item that was never delivered.
4. Processing Errors – A transaction is processed twice due to a technical error.
5. Duplicate Charges – A merchant accidentally charges a customer multiple times for the same purchase.

Chargeback vs. Refund: What’s the Difference?

Many people confuse chargebacks with refunds, but they are two distinct processes:

• A refund occurs when a customer directly requests the merchant or payment service provider (such as a upi app) to return their money.
• A chargeback, on the other hand, is initiated by the bank when a customer disputes a transaction, and the bank investigates before processing the reversal.

While refunds are a more straightforward process handled between the merchant and the customer, chargebacks involve multiple banks and regulatory processes, making them more complex.

Why Are These Changes Needed?

Currently, chargebacks can be initiated on the same day as the transaction, leading to multiple challenges:

• Banks often do not have enough time to verify and process returns before chargebacks are raised.
• Some banks mistakenly initiate refund requests without checking if a chargeback is already in process.
• In such cases, chargebacks are automatically accepted on a deemed approval basis, which can result in penalties from the Reserve Bank of India (RBI).

By introducing automated acceptance and rejection, NPCI aims to:
✅ Reduce the time taken to resolve disputes.
✅ Minimize errors caused by manual processing.
✅ Prevent unnecessary penalties due to mismanagement of chargebacks.
✅ Streamline the UPI ecosystem for both banks and customers.

How Will This Affect Customers?

For regular upi users, this change will not directly impact how they make payments or raise disputes. The improvements are being made behind the scenes to ensure that chargebacks are processed more efficiently.

• If a customer raises a dispute, their bank will still handle it as before.
• The difference is that banks will now have an automated system to decide whether the chargeback should be approved or rejected based on TCC and return data.

Final Thoughts

With upi being one of the most widely used digital payment systems in India, ensuring a smooth and error-free chargeback process is crucial. These new changes will help banks and payment providers handle disputes more effectively, ultimately enhancing trust in the UPI ecosystem.

As the February 15 implementation date approaches, banks and payment service providers will update their systems to comply with the new guidelines, ensuring a faster and more efficient chargeback resolution process for all stakeholders.

The Securities and Exchange Board of India (SEBI) has proposed a significant enhancement to the UPI (Unified Payments Interface) payment system for capital market transactions. This move aims to strengthen investor security, reduce fraudulent activities, and improve payment transparency by ensuring that funds are directed only to legitimate, SEBI-registered market intermediaries.

The proposal introduces multiple security features, including unique UPI IDs for registered intermediaries, a verification icon for payment authentication, and an increased daily UPI transaction limit of ₹5 lakh. The changes seek to create a secure and streamlined environment for investors engaging in stock trading, mutual fund investments, and other financial activities within the capital markets.

---

Key Features of the Proposed UPI Mechanism

SEBI plans to assign each registered market intermediary a unique alphanumeric UPI ID. This identifier will help investors verify the authenticity of intermediaries before making payments. It serves as a critical layer of protection against fraud, as unregistered entities often mislead investors and collect funds unlawfully.

Verification Icon for Payment Authenticity

To further enhance security, SEBI proposes a distinct verification icon—a “thumbs-up” symbol within a green triangle—that will appear when payments are made to verified intermediaries. This visual indicator will assure investors that their funds are being directed to legitimate entities.

If this verification icon is missing, investors will be alerted that the intermediary may not be registered with SEBI, signaling potential fraud.

Increased Daily UPI Transaction Limit

To facilitate higher-value transactions securely, SEBI proposes raising the current UPI transaction limit from ₹2 lakh to ₹5 lakh per day. This change will be implemented in collaboration with the National Payments Corporation of India (NPCI), which operates the UPI framework.

The increased transaction limit will be particularly beneficial for investors making large-scale investments in stock trading, mutual funds, and other financial instruments. SEBI has indicated that the limit will be reviewed periodically to ensure it continues to meet market demands.

---

Addressing Rising Fraud in Capital Markets

Since 2019, when SEBI permitted UPI payments in the securities market, the number of fraudulent activities involving unregistered entities has grown. These entities often impersonate legitimate market intermediaries, collecting funds from unsuspecting investors under false pretenses.

SEBI’s proposed secure UPI payment framework is a response to these increasing risks. By introducing unique UPI IDs and a verification system, SEBI aims to minimize fraud and foster greater trust in digital transactions within the capital markets.

---

How Will These Changes Benefit Investors?

1. Enhanced Security:
   The unique UPI ID and verification icon will help investors confidently identify legitimate intermediaries and avoid fraudulent transactions.
2. Higher Transaction Limits:
   The increased UPI limit of ₹5 lakh per day will enable smoother and safer high-value transactions, reducing the need for traditional payment methods that may involve longer processing times.
3. Greater Transparency:
   By directing payments solely to registered market intermediaries, SEBI’s framework will promote transparency and accountability in financial transactions.
4. Reduced Fraud:
   The mechanism will act as a deterrent against unregistered entities attempting to deceive investors.

---

Public Consultation and Stakeholder Involvement

To ensure a well-rounded and effective implementation, SEBI has invited public comments on the proposal until February 21, 2025. This consultation period allows stakeholders, including investors, market intermediaries, and industry experts, to share their feedback and suggestions.

By seeking public input, SEBI aims to develop a payment mechanism that aligns with the needs of the capital markets while safeguarding investor interests.

---

Conclusion

SEBI’s proposal for a secure UPI payment mechanism underscores its commitment to strengthening investor protection and enhancing market transparency. The introduction of unique UPI IDs, verification icons, and higher transaction limits marks a significant step forward in creating a safe and efficient payment ecosystem for capital market transactions.

As SEBI works to finalize the framework, collaboration with stakeholders and adherence to robust security measures will be crucial in building a trusted digital financial environment.

HDFC Bank has issued a notification informing customers about the temporary unavailability of its Unified Payments Interface (UPI) services due to scheduled system maintenance. This service suspension is necessary to improve system performance and ensure a smoother transaction experience in the future.

Key Details:

• Date: February 8, 2025
• Downtime: 12:00 AM to 3:00 AM (Saturday)
• Duration: 3 hours
• Affected Services:
  • UPI transactions for current and savings account holders
  • Payments and transactions involving RuPay credit cards linked to UPI

During the maintenance window, customers will not be able to initiate or complete UPI-based transactions. This includes peer-to-peer transfers, bill payments, merchant transactions, and other UPI-related services through HDFC Bank’s platform.

Advice to Customers:
To avoid disruptions, customers are strongly encouraged to plan and complete any critical transactions before the maintenance period. This will help ensure a seamless banking experience without interruptions during the downtime.

Customer Support:
HDFC Bank remains committed to providing assistance to its customers. In case of any queries or concerns, customers can reach out to the bank’s customer service helpline or use alternative payment methods during the affected hours.

The bank appreciates the understanding and cooperation of its customers as it works to enhance its digital payment infrastructure for a better service experience.

As February 2025 begins, a series of significant regulatory changes are now in effect, reshaping how customers interact with banking and financial services. These changes, effective from February 1, 2025, cover a broad range of financial activities, including ATM withdrawals, Unified Payments Interface (upi) transactions, and other core banking services. Consumers are encouraged to be aware of these updates, as they could impact everything from digital payments to daily banking operations.

Key Financial Changes in February

UPI Transaction ID Update

Effective February 1, 2025, the National Payments Corporation of India (NPCI) has introduced a new mandate that all Unified Payments Interface (upi) transaction IDs must be alphanumeric. This change aims to enhance the standardization and security of UPI transactions, ensuring they are easier to track and process. By adopting a uniform format, the NPCI hopes to improve the clarity and consistency of UPI transactions. As a result, transactions that don’t comply with the new alphanumeric format will be automatically rejected by the system. This means users must ensure that their UPI apps are updated and in compliance with the new format to avoid any disruption in their transactions.

Revised Minimum Balance Requirements

Several major banks have revised their minimum balance requirements for savings accounts, with penalties now applicable for customers who fall below the new thresholds. These changes affect both urban and rural banking customers:

• State Bank of India (SBI) has increased its minimum balance requirement to Rs 5,000 (up from Rs 3,000).
• Punjab National Bank (PNB) now mandates a minimum balance of Rs 3,500 (up from Rs 1,000).
• Canara Bank has raised its minimum balance requirement to Rs 2,500 (up from Rs 1,000).
  Account holders failing to maintain the required balance will incur penalty charges. These changes may affect customers who are used to maintaining lower balances in their savings accounts, so it’s important to check account terms and stay updated to avoid penalties.

Kotak Mahindra Bank 811 Savings Account Updates

Effective February 1, 2025, Kotak Mahindra Bank has revised its 811 digital savings account policies. These changes are primarily focused on fees for transactions such as cash deposits and ATM withdrawals:

• Cash deposits exceeding Rs 10,000 per month will now incur a fee of Rs 5 per Rs 1,000, with a minimum charge of Rs 50.
• The ATM decline fee will now apply only for non-Kotak ATMs, charging Rs 25 per declined transaction.
• The standing instruction failure fee has been reduced from Rs 200 to Rs 100.
  These changes make it important for Kotak Mahindra 811 account holders to plan their transactions and avoid unnecessary charges. Regularly reviewing the terms and conditions of the savings account could help customers better manage fees and make the most of their banking experience.

IDFC FIRST Credit Card Changes

IDFC FIRST Bank has also introduced several updates to its credit card offerings, which will take effect from February 20, 2025. The changes mainly affect fees and services related to payments and card replacements:

• Revised Statement Dates: The statement dates will now be revised, and customers will need to be aware of the new billing cycle.
• New Fees on Education Payments: Payments made for educational expenses through platforms such as CRED and PayTM will now attract additional fees.
• Card Replacement Fee: The fee for replacing a lost or damaged IDFC FIRST credit card will now be Rs 199, plus applicable taxes.
• Joining and Annual Fees: A joining fee and annual fee of Rs 499 (plus taxes) will be introduced, effective after February 20, 2025.
  Credit cardholders are advised to check their accounts for the updated fees and ensure they are aware of the new charges for education payments, as this could impact payments made through third-party platforms.

RBI Monetary Policy Review on February 7

The Reserve Bank of India’s (RBI) Monetary Policy Committee will convene between February 5-7, 2025. Market experts are anticipating a potential cut in the repo rate, which would lower the interest rates at which commercial banks borrow from the central bank. This change would directly influence the rates for loans, mortgages, and deposits across all banks. If the RBI decides to reduce the repo rate, it could make borrowing cheaper, benefiting consumers who are looking to take out loans or credit, while savers may see lower returns on their fixed deposits and savings accounts. The RBI’s decision could also have an impact on inflation and the overall economic outlook, making it an important development for financial markets and consumers alike.

---

Why Staying Informed Matters

These regulatory changes signal a shift in the landscape of personal finance and banking in India, and it’s essential for consumers to stay informed about how these adjustments may affect their day-to-day transactions. From revised fees and charges to new standards in digital payments, being aware of the updates can help individuals plan their financial activities more effectively and avoid unnecessary penalties or surprises. As India continues to evolve in its digital banking and payment systems, such changes are expected to play a key role in streamlining financial services for users across the country.

MobiKwik Shifts Focus to UPI Expansion and RuPay Credit Card Launch to Boost Growth

Fintech platform MobiKwik is strengthening its focus on scaling its UPI (Unified Payments Interface) business and preparing to launch a RuPay credit card to the public as part of its strategy to drive long-term growth. Upasana Taku, the executive director, co-founder, and CFO of MobiKwik, emphasized these priorities during the company’s analyst call following its Q3 FY25 earnings report.

“The IPO provided us with ₹572 crore, and we are strategically planning its allocation to double down on existing business lines while investing in new ones that offer long-term growth potential,” Taku explained. She noted that the company is adopting a prudent approach to resource allocation, focusing on opportunities that will enhance operational efficiency and future profitability.

Financial Performance and Market Dynamics

MobiKwik reported a quarterly loss of ₹55 crore in Q3 FY25, a decline from the ₹5 crore profit it registered during the same period in Q3 FY24. However, revenue from operations grew to ₹269 crore in Q3 FY25, up from ₹229 crore year-over-year. For the nine months of FY25, the company generated ₹346 crore in revenue, surpassing its full-year FY24 figure of ₹317 crore.

Despite the short-term losses, MobiKwik remains optimistic. “We see green shoots, and we expect disbursals will come back to the same level as FY24, which will result in stronger margins and bottom-line performance in the quarters to come,” Taku said.

The company’s payments business grew by an impressive 166% in Q3 FY25, generating ₹196.5 crore in revenue. Taku highlighted a notable shift in revenue composition, with 73% of revenue in the first nine months of FY25 coming from payments, compared to 70% from financial product distribution in the previous year.

UPI and RuPay Credit Card Initiatives

To capitalize on the booming digital payments market, MobiKwik is aggressively expanding its UPI offerings. The company is focusing on scaling up Pocket UPI and credit card payments on UPI to drive growth. Pocket UPI allows users to make prepaid payments or pay with their wallet on any UPI QR code deployed by banks or payment companies. With MDR (merchant discount rates) attached to these transactions, it offers a potential revenue stream for the company.

“We started scaling up these products in 2024 and are already witnessing strong growth. Pocket UPI and credit card payments on UPI are critical for our growth trajectory,” Taku noted.

MobiKwik’s co-branded RuPay credit card, currently in beta on the MobiKwik app, is expected to be launched publicly soon. “This RuPay credit card will enable us to offer small-ticket credit for everyday spending on UPI, and it is also an MDR-generating product,” Taku said, emphasizing its potential to create a steady revenue stream.

Credit, Savings, and Insurance Expansion

On the lending side, MobiKwik is focused on balancing its credit distribution portfolio by introducing secured products, exploring new commercial models, and partnering with additional lending institutions. The company is scaling down its MobiKwik Zip product due to reduced lending partner appetite for small-ticket credit offerings but remains optimistic about the long-term potential of financial product distribution.

To enhance its offerings in savings and insurance, MobiKwik has made significant investments in Lens.ai, a digital advisory platform. “We are positioning Lens.ai as a digital advisor for the Markets of India, helping users invest via the MobiKwik app into mutual funds, fixed deposits, digital gold, and other financial products we plan to add,” Taku shared. Additionally, the company plans to launch its insurance distribution services later this year.

Strategic Partnerships and Industry Trends

MobiKwik recently partnered with Piramal Finance to offer personal loans, signaling its intent to diversify credit offerings despite scaling back Zip. This shift aligns with broader fintech trends, where companies are moving away from high-risk, small-ticket loans in favor of more stable and quality-focused credit products.

Appalla Saikiran, Founder & CEO of Scope, an invite-only networking platform with a fintech and gaming-focused venture capital fund worth $45 million, commented on the strategic shift. “Scaling down products like Zip highlights a broader fintech trend—moving away from high-risk, small-ticket loans to focus on quality over quantity. Despite losses, MobiKwik’s shares surged post-IPO, indicating investor confidence in fintech’s long-term potential. The market seems to value growth potential and revenue scale over short-term profitability, especially for firms demonstrating strong operational metrics,” Saikiran said.

A Strategic Pivot for Sustainable Growth

Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik currently serves 172 million registered users and 4.5 million merchants, offering a wide range of payment products such as MobiKwik Wallet, UPI, Pocket UPI, and Zaakpay (payment gateway). The fintech startup has also ventured into distributing credit, savings, investment, and insurance products on its platform.

MobiKwik’s renewed focus on scaling its payments business, diversifying financial products, and launching the RuPay credit card underscores its strategic pivot to secure steady income streams and navigate market challenges. With a strong emphasis on operational efficiency and strategic investments, the company is positioning itself for long-term growth in the competitive fintech landscape.

The National Payments Corporation of India (NPCI) has announced a critical update for Unified Payments Interface (UPI) transactions. Effective February 1, 2025, UPI apps that generate transaction IDs containing special characters will face disruptions as these transactions will be declined by the central system. The move is aimed at improving system efficiency, standardizing transaction processes, and enhancing security across the UPI ecosystem.

Why the Change?

In an official circular dated January 9, 2025, NPCI emphasized the need for uniformity in UPI transaction ID formats. According to the circular:

“Considering the criticality of compliance to the specifications, it has been decided not to allow any special characters in UPI transaction IDs. Any transaction with an ID containing special characters shall be declined by the central system. This shall be effective from February 1, 2025.”

The decision follows a previous directive issued on March 28, 2024, where NPCI instructed payment service providers (PSPs) to adopt a standardized 35-digit alphanumeric format for transaction IDs. Despite significant progress in compliance, some payment ecosystem players continue to use special characters in transaction IDs, prompting NPCI to enforce stricter measures.

Impact on Consumers and Businesses

For UPI users, this directive means that transactions made through non-compliant apps will no longer be processed. Apps that fail to conform to the updated requirements will be unable to facilitate payments from February 1, 2025.

Mohan K, Founder of TechFini, explained the rationale behind the move:

“UPI transactions containing special characters in their transaction IDs will be declined by the central system. Only transaction IDs that follow an alphanumeric format will be processed successfully. This move aims to enhance system efficiency, prevent potential security vulnerabilities, and ensure uniformity across UPI transactions.”

Alok Singh, Executive Vice President at Ongo (AGS Transact), highlighted the compliance status:

“Most major payment ecosystem players have already complied with the NPCI directive regarding 35-digit alphanumeric transaction IDs. However, some PSPs remain non-compliant. Consumers using these non-compliant apps will face transaction failures post-February 1, 2025.”

Rahul Jain, CFO at NTT DATA Payment Services India, emphasized NPCI’s ample notice period:

“The NPCI has provided sufficient time for industry players to transition and adhere to UPI technical criteria. Transactions with special characters will be rejected after the deadline. Given the current state of preparedness, most players have already ensured compliance to avoid disruptions.”

Additional NPCI Guidelines

1. Transaction ID Length:
   • All UPI transaction IDs must be exactly 35 characters long and consist only of alphanumeric characters.
   • NPCI mandates validation at the central system level to reject any transaction IDs not meeting these specifications.
2. Duplicate Transaction IDs:
   • Duplicate transaction IDs have caused settlement issues and customer dissatisfaction. NPCI has reinforced the validation process to prevent such occurrences.
   • In cases where duplicate IDs are processed by the central system, the liability will fall on the defaulting PSP.
3. Transaction Monitoring:
   • If successful transactions are not present in the raw data files provided by PSPs, beneficiary banks must hold the funds in the beneficiary account.
   • Such cases should be reported to NPCI for resolution.

Benefits of Standardization

Standardizing UPI transaction IDs is expected to resolve current inefficiencies in tracing unique transactions. Alok Singh from Ongo explained:

“With so many UPI apps generating transaction IDs using their own systems, it becomes challenging to trace transactions. Customers often face difficulties when quoting transaction IDs during complaints. A standardized 35-digit transaction ID can help identify PSPs, remitters, dates of transactions, and other key details.”

Mohan K from TechFini added:

“By eliminating special characters, UPI can streamline processing, reduce errors, and improve interoperability among banks and payment service providers. Merchants, payment gateways, and financial institutions must ensure that all transaction IDs generated or processed within their systems conform to the alphanumeric requirement to prevent payment failures.”

Consumer Action Required

UPI users are advised to ensure that the payment apps they use are compliant with the NPCI directive. If an app continues to generate transaction IDs with special characters after February 1, 2025, transactions will be declined by the central system, leading to potential payment disruptions.

This move by NPCI underscores its commitment to standardizing payment processes and enhancing the reliability of digital transactions across India.