UPI Has Transformed India’s Monetary System
Since its inception, the Unified Payments Interface (UPI) has revolutionized India’s financial ecosystem, making digital transactions seamless, secure, and widely accessible. Developed by the National Payments Corporation of India (NPCI), UPI has fostered financial inclusion, reduced dependence on cash, and provided users with an instant, hassle-free way to send and receive money. With continuous advancements, UPI has expanded its capabilities, integrating with international payment systems and launching innovative features such as UPI Lite and credit-linked UPI transactions.
As UPI continues to evolve, new regulations are periodically introduced to enhance security, interoperability, and user experience. Starting April 1, 2025, the NPCI has rolled out fresh guidelines to streamline UPI transactions, address security concerns, and improve service reliability.
The Need for New UPI Guidelines
To maintain the integrity and efficiency of the UPI system, NPCI regularly updates its operational protocols. The latest guidelines primarily focus on reducing transaction errors related to outdated mobile numbers, preventing fraud, and improving digital security. The revisions come in response to concerns about reassigned or inactive mobile numbers leading to payment failures and security vulnerabilities. Additionally, the discontinuation of certain features aims to curb fraudulent transactions and enhance consumer safety.
Key Changes in UPI Guidelines from April 1, 2025
- Mobile Number-Based UPI ID Updates
One of the significant updates involves the Mobile Number Revocation List/Digital Intelligence Platform (MNRL/DIP). Banks and Payment Service Provider (PSP) applications must now refresh their databases at least once a week to identify inactive or reassigned mobile numbers. This change ensures that transactions linked to old or reassigned numbers do not pose security risks or result in unintended fund transfers.
As per the Department of Telecommunications (DoT) guidelines, mobile numbers that remain inactive for 90 days can be reassigned to new subscribers. Under the new UPI rules:
- UPI IDs linked to dormant mobile numbers will be deactivated.
- Users must keep their registered mobile numbers active to avoid service disruptions.
- Recycled or churned numbers will no longer have access to previous UPI-linked accounts.
- Deactivation of Dormant Mobile Number-Linked UPI IDs
If a user’s registered mobile number has been inactive for an extended period, their associated UPI ID will be unlinked. This measure ensures that reassigned mobile numbers do not retain access to old UPI accounts, thereby reducing the risk of unauthorized transactions. To prevent UPI service interruptions, customers must:
- Ensure their bank records reflect their active mobile number.
- Regularly update mobile numbers linked to their UPI account if they switch numbers.
- Verify UPI functionality before March 31, 2025, to avoid unexpected disruptions.
- Phasing Out of ‘Collect Payments’ Feature
NPCI has also announced that the “Collect Payments” or pull-payment feature will be restricted to verified merchants only. This change aims to curb rising fraud incidents associated with unauthorized collect requests.
- Person-to-person collect payments will now be capped at ₹2,000.
- Only large, verified businesses will retain access to this feature.
- Users are encouraged to use direct transfer methods instead of relying on collect requests.
Who Will Be Affected by These UPI Changes?
The new guidelines will impact three major categories of users:
- Users who have changed their mobile number but have not yet updated it in their bank accounts.
- Users with cancelled, surrendered, or recycled mobile numbers that are still linked to their UPI ID.
- Users who have surrendered their mobile SIM cards but have not yet notified their banks about the change.
Steps to Ensure a Smooth UPI Experience Post-March 31, 2025
To prevent any disruptions in UPI services, users should take the following steps before the new rules take effect:
- Keep your registered mobile number active: Ensure that the mobile number linked to your bank account is in regular use. Avoid letting it become dormant for extended periods.
- Update your bank records: If you have changed your mobile number, notify your bank immediately and update your contact details in their records.
The Impact of These Changes
The new UPI guidelines introduced by NPCI are designed to enhance security, minimize transaction failures, and improve interoperability across financial institutions. While these measures may require some users to update their mobile details, they ultimately contribute to a more secure and efficient payment ecosystem.
By ensuring that mobile number-linked UPI IDs remain updated, NPCI is addressing a critical security risk associated with reassigned numbers. Furthermore, phasing out high-risk features like collect payments for unverified users will significantly reduce fraud cases.
For users, these updates reinforce the importance of keeping personal banking information current. As UPI continues to be the backbone of India’s digital payment system, staying informed and proactive about such changes will ensure uninterrupted and secure transactions for all stakeholders in the financial ecosystem.
(With inputs from agencies)
