UPI services will be unavailable for some users from April 1; check here

UPI services will be unavailable for some users from April 1; check here

  • 21.03.2025 10:02
  • business-standard.com
  • Keywords: Fraud, Security Concerns

UPI services will stop for users with inactive mobile numbers starting April 1 due to security concerns. Those who change or deactivate their numbers without updating banks may lose access. The move aims to prevent fraud by removing unused UPI IDs from the network.

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Estimated market influence

Google Pay

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Analyst rating: N/A

Will be impacted by NPCI's move to remove inactive mobile numbers linked to UPI IDs, potentially affecting user access and security.

Paytm

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Analyst rating: N/A

Likewise, Paytm users with inactive mobile numbers will lose access to their UPI services, increasing the risk of fraud.

PhonePe

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Analyst rating: N/A

PhonePe users face similar risks and potential service disruptions due to NPCI's new policy on inactive mobile numbers.

NPCI

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Analyst rating: N/A

NPCI is taking proactive steps to enhance security by removing UPI IDs linked to inactive mobile numbers, thereby mitigating fraud risks.

Context

Analysis of UPI Service Unavailability Impact

Key Facts and Data Points

  • Effective Date: April 1, 2025
  • Affected Users:
    • Users who changed mobile numbers without updating their bank details.
    • Users with deactivated mobile numbers.
    • Users whose mobile numbers have been reassigned to others.
    • Inactive mobile numbers unused for calls or messaging.
  • Reasons: Security concerns and fraud prevention.
  • Affected Platforms: Google Pay, Paytm, PhonePe, etc.

Market Impact

  • Decline in UPI Adoption: Users with inactive or reassigned numbers may lose access to digital payment services, potentially reducing overall UPI adoption rates.
  • Fraud Prevention: The move aims to mitigate rising fraud cases linked to inactive mobile numbers.
  • Cost Implications for Banks and Apps: Increased operational costs due to monitoring and compliance requirements.

Competitive Dynamics

  • Enhanced Security Standards: Payment apps like Google Pay, Paytm, and PhonePe may differentiate themselves by ensuring compliance with NPCI guidelines.
  • Potential Market Shifts: Users who lose access may switch to alternative payment platforms or services.

Strategic Considerations

  • Proactive Communication: Banks and payment providers should notify users about the need to update mobile numbers to retain UPI access.
  • Fraud Detection Systems: Investment in advanced fraud detection mechanisms to align with NPCI guidelines.

Long-term Effects and Regulatory Impact

  • Regulatory Alignment: The move reflects India’s broader focus on financial security and digital payments regulation.
  • Potential Expansion: Similar measures may be adopted by other countries, influencing global payment systems.

This analysis highlights the critical importance of compliance with regulatory standards for maintaining secure and efficient digital payment ecosystems.