The National Payments Corporation of India (NPCI) has released an addendum to its earlier circular regarding the Numeric UPI ID solution. This addition marks a significant step in enhancing the functionality and security of the Unified Payments Interface (UPI) system in India.
In line with this recent announcement, NPCI has introduced a set of new guidelines aimed at bolstering interoperability and enhancing the client experience for UPI payments based on numbers. These updated rules are slated to come into effect on April 1, 2025, and will be applicable to UPI member banks, various UPI applications, and third-party app providers (TPAPs).
Compliance Requirements for Banks and PSPs
As per the directives from NPCI, banks, financial institutions, and Payment Service Provider (PSP) applications are now mandated to leverage the Mobile Number Revocation List/Digital Intelligence Platform (MNRL/DIP). They are required to refresh their databases at least once every week. This regular update mechanism is crucial as it directly targets the reduction of transaction errors that often occur due to outdated or reassigned mobile numbers. By ensuring that their records are up-to-date, these entities can significantly improve the reliability and accuracy of UPI transactions.
New UPI Rules Taking Effect from April 1, 2025
The upcoming new UPI guidelines, set to be enforced on April 1, 2025, introduce important changes regarding the linkage between UPI IDs and mobile numbers. Specifically, UPI IDs associated with dormant mobile numbers are likely to be deactivated. If the mobile number registered with the bank has been inactive for an extended period, the corresponding UPI ID will be unlinked, thereby rendering UPI services unavailable for that user.
To ensure uninterrupted access to UPI services, clients are strongly advised to keep the mobile numbers registered with their banks current and active. Inactive or reassigned mobile numbers can lead to a suspension of UPI services linked to them. Therefore, it is essential for users to update their bank records with the correct mobile number in a timely manner.
It's worth noting that disconnected mobile numbers, as determined by the Department of Telecommunications (DoT), can be reassigned to new subscribers after a period of 90 days. Typically, if a customer does not engage in any calls, send text messages, or use data on their mobile number for three consecutive months, the telecom service provider deactivates the number. These disconnected numbers may then be assigned to new subscribers, which can sometimes give rise to what are commonly referred to as recycled or churned numbers. Users falling into this category will need to take appropriate steps to reconfigure their UPI services accordingly.
Phasing Out of the 'Collect Payments' Functionality
In tandem with these other changes, NPCI has initiated the process of gradually phasing out the 'Collect Payments' functionality from the UPI system. This move is primarily a response to the increasing incidence of fraud incidents related to this feature. The pull-payment system will be restricted to large, verified merchants only. Additionally, for person-to-person (P2P) collection payments, a cap of 2,000 will be imposed.
Users Affected by the Changes
There are three main types of mobile users who will need to reconfigure their UPI services as a result of these new rules. These include:
- Subscribers who have changed their mobile numbers but not yet updated their bank accounts: Such users need to ensure that their bank records reflect the new mobile number to continue using UPI services seamlessly.
- Those who have surrendered their mobile SIMs but haven't updated their bank accounts: They must update their bank details with the new mobile number they are using to maintain access to UPI.
- Users retaining a cancelled, surrendered, or recycled mobile number still associated with UPI: For these individuals, it is crucial to link their UPI services to a currently active and valid mobile number to prevent any disruption in service.
In conclusion, these new developments signify NPCI's commitment to enhancing the security and efficiency of the UPI system. Users and service providers alike must be aware of and adhere to these changes to ensure smooth and secure UPI transactions in the future.
