NPCI to push out pull transactions from November with eye on reducing UPI scams
Aug 12, 2025
Synopsis
NPCI is discontinuing recipient-initiated person-to-person digital payments, known as ‘pull’ transactions, via UPI from October 31. This decision aims to reduce the increasing incidents of online fraud, where users are tricked into authorising payments. While P2P pull transactions constitute a small percentage of total UPI transactions, their misuse has prompted this measure.
The National Payments Corporation of India (NPCI), which runs the Unified Payments Interface (UPI), is shutting down ‘pull’ transactions, or recipient-initiated person-to-person digital payments, from October 31, in a bid to curb fraud, said people with knowledge of the development.
NPCI sent a communication to banks and fintech firms, they said.
NPCI has told those that operate as third-party UPI applications that it is doing away with the feature, said people in the know. It comes after NPCI capped the pull method at Rs 2,000 per transaction in 2019.
The move comes in the wake of an increase in online scams, involving users unknowingly authenticating transactions and losing money in the process.
ET reported on March 18 that NPCI was considering disallowing pull transactions.
UPI currently allows both ‘push’ and ‘pull’ transactions under the real-time payment system. In the first case, the payer initiates the transaction, scans a QR code or inputs the beneficiary’s UPI ID to make a payment.
The second is a pull, or collect, payment method, where the beneficiary initiates the transaction. Once the payer inputs the personal identification number, the transaction gets approved.
It is this latter feature that is being removed, not because of issues with the product, but because it is being increasingly misused, bankers told ET.
Queries emailed to NPCI did not elicit a response.
“In the initial days, this feature was designed with the thought that friends splitting a bill can send pull payment links after the party, just to be approved by the other person,” said a senior fintech industry executive on condition of anonymity.
However, “there are a lot of frauds happening in such payments, where fraudsters take money from gullible consumers in the garb of actually sending money,” said a senior banker, who did not wish to be identified.
Preventing fraud
One of the bankers cited earlier said unverified merchant payments could be NPCI’s next target.
Industry insiders told ET that P2P pull transactions account for only about 3% of UPI transactions, making the call to suspend the feature not so difficult.
Many fraudsters behave as merchants while pulling money out of the customer’s bank account in this manner. That is why people acting as merchants, using QR codes for payments and not having completed know-your-customer (KYC) mandates might also come under the scanner, the banker said.
According to the Reserve Bank of India data, frauds related to payment cards and internet banking more than doubled to 29,000 attacks in FY25, involving about Rs 1,457 crore. There were 13,516 such attacks, involving Rs 520 crore, in the previous financial year.
UPI clocked 7 billion P2P transactions in July, of a total 19.4 billion transactions recorded by NPCI, up from about 5 billion a year ago, when total transactions stood at 14 billion.
[The Economic Times]
