From April 1, these rules will change for  UPI payments; details here

The National Payments Corporation of India (NPCI) is implementing new guidelines for Unified Payments Interface (UPI) number-based transactions starting April 1, 2025. This regulatory change requires banks and Payment Service Provider (PSP) apps to update mobile number records weekly to mitigate errors in transaction processing. 

The latest regulations mandate banks, Payment Service Providers (PSPs), and third-party UPI service providers like PhonePe, GPay, and Paytm to adhere to specified measures concerning numeric UPI IDs.

A significant aspect of these guidelines is the necessity for UPI users to explicitly opt in for the seeding of their UPI numbers, reinforcing the clarity and transparency of consent mechanisms. Notably, consent cannot be obtained during or before transaction processes, ensuring user preferences and data integrity are preserved.

All members of the Unified Payments Interface (UPI) ecosystem, such as banks, apps, and third-party providers, have been asked to integrate the new modifications by March 31, 2025. The enhanced framework aims to bolster security measures, curb fraudulent activities, and elevate the quality of user interactions during UPI transactions. 

The regulations set forth by NPCI also permit PSP apps to locally resolve UPI numbers in instances where NPCI's system experiences response delays. It is mandatory for such occurrences to be reported on a monthly basis, which is intended to bolster the efficiency and reliability of the UPI ecosystem. This monthly reporting requirement ensures transparency and accountability, driving improvements within the digital payment processes. Compliance by all UPI members must be completed by March 31, 2025, to guarantee that these changes are consistently applied across the network.

Within the broader financial technology sector, UPI remains crucial in driving digital payments in India, a nation that has witnessed immense growth in this domain. However, specific statistical claims regarding UPI transaction volumes are not detailed in the current guidelines. The enforcement of these new rules by NPCI aims to streamline operations and reduce transaction errors, ultimately enhancing user trust and operational efficiency in the digital payments landscape. 

Competitors in the UPI space, such as Google Pay and Paytm, are likely to adjust their operational protocols to comply with the new directives. These companies have been instrumental in popularising UPI transactions across India and will need to ensure seamless integration with the updated regulatory framework to maintain their competitive positions. This adaptation is crucial for sustaining the reliability and efficiency of their services under the revised guidelines.