UPI: To mitigate instances of digital fraud, the National Payment Corporation of India (NPCI) is contemplating the removal of ‘pull transactions’ from the Unified Payment Interface (UPI). Preliminary discussions are currently underway between NPCI and various banks regarding this matter.
Pull transaction method
A significant portion of digital fraud is attributed to the pull transaction method, prompting NPCI to investigate the feasibility of completely abolishing this feature to curb such incidents. A report suggests that discontinuing pull transactions could lead to a decrease in digital fraud cases. However, some bankers express concerns that this action might negatively impact legitimate transactions and potentially diminish the efficiency of UPI payments. NPCI has yet to provide any official statement on this issue.
As the organization responsible for managing the online retail transaction and settlement system in India, NPCI’s discussions are still in the early stages, and no definitive decision has been made regarding implementation. These talks are occurring at a time when UPI transactions are gaining significant traction in the country, with 16 billion transactions recorded in February alone, amounting to over Rs 21 lakh crore.
What is Pull Transaction?
A pull transaction occurs when a merchant initiates a payment request to customers, with the payment amount pre-filled, requiring only the customer’s PIN entry in their UPI app. Conversely, a push transaction involves the customer manually entering the payment amount, typically through a QR code or other methods. The RBI Ombudsman has received over 27,000 complaints in the first half of the financial year 2024-25, with 14,401 complaints logged from April to June 2024 and 12,744 from July to September 2024.