In response to the alarming rise in online payment fraud, the government is weighing a proposal requiring a minimum 4-hour time lag for initial UPI/IMPS transactions above ₹2,000 between two users.
Unlike existing restrictions on newly-created accounts, officials said this rule would apply to every first-time transaction exceeding ₹2,000, irrespective of individual payment histories.
The aim is to curb the instant exploitation of recipients through fraudulent payments from unverified numbers before errors can be flagged or amounts recalled. While acknowledging potential friction for consumers, authorities underline this is critical for strengthening cybersecurity.
The plan was discussed in a high-level meeting on Tuesday between the Reserve Bank of India, major banks like SBI, tech companies like Google Pay, and regulators. A senior official explained the process would mimic NEFT, providing users a 4-hour window post-transaction to reverse or amend payments to new contacts above ₹2,000.
To reduce inconvenience, smaller grocery or utility payments may be exempted from additional authentication requirements. But larger unfamiliar sums warrant additional safeguards.
India already caps UPI payments 24 hours after new VPA creation and restricts new NEFT beneficiaries. But fraudsters seamlessly switch contact points after duping users. Hence this blanket rule covers all citizens, amounts, and intermediaries.
While some friction is inevitable, officials feel alert users can adjust transaction patterns to account for a 4-hour buffer above ₹2,000 milestone. Robust security measures are essential as digital penetration widens. Forcing frauds to prove recipient legitimacy even briefly can act as a strong deterrent.
With UPI processing over ₹12 lakh crore yearly, securing customer trust is vital. As per NPCI, disputed transactions still comprise just 0.12% of overall volumes. But precaution can help restrict losses and shield adoption among less tech-savvy Indians. Inconveniencing users temporarily seems a small price for billion-dollar protection.
