NPCI to Phase Out ‘Collect Call’ Transactions to Reduce UPI Fraud
The National Payments Corporation of India (NPCI) is set to phase out the ‘collect call’ feature in Unified Payments Interface (UPI) transactions to curb rising fraud cases. The feature, which allows merchants to send payment requests to customers for approval, has been widely exploited by scammers tricking users into authorizing unintended payments. To enhance transaction security, NPCI is pushing for the adoption of ‘push’ transactions where customers initiate payments themselves by scanning a merchant’s QR code or entering the UPI ID. This change aims to give customers better control over their transactions and reduce the risk of fraud.
With the increase in digital payment frauds, the Reserve Bank of India (RBI) has been closely monitoring UPI transactions. Data from the RBI shows that in the first half of the 2024-25 fiscal year alone, over 13,000 digital payment fraud cases were reported, amounting to a total loss of ₹514 crore. The move to eliminate ‘collect call’ transactions is part of a broader effort to fortify India’s digital payment ecosystem against fraudulent activities. The NPCI has also recommended the integration of stronger authentication measures and real-time fraud detection systems to further safeguard users.
The transition away from ‘collect call’ transactions will have implications for multiple stakeholders. Merchants, particularly small businesses that rely on this feature, will need to shift towards QR-based payment systems. While this may require an initial adjustment, it is expected to improve transaction security and customer trust in the long run. Customers will have to adapt to initiating their payments manually, which reduces the likelihood of falling victim to fraud. Major payment platforms such as Google Pay and PhonePe, which primarily facilitate ‘push’ transactions, may experience increased transaction volumes as users adjust to the new framework.
NPCI is also working with banks and fintech companies to educate users on best practices for digital transactions. The organization has launched awareness campaigns to inform customers about common fraud tactics, such as phishing and fake UPI apps. Additionally, banks are being encouraged to enhance security features by integrating biometric authentication and AI-driven transaction monitoring to detect suspicious activities. Regulators are also tightening consumer protection guidelines, ensuring swift resolutions for unauthorized transactions and fraudulent cases.
The RBI and NPCI’s latest measures reflect a broader commitment to strengthening digital payment security in India. By phasing out risky payment methods and promoting customer-initiated transactions, the financial sector aims to build a more secure and reliable payment ecosystem. The move is expected to not only reduce fraud but also boost public confidence in digital transactions.
