The National Payments Corporation of India (NPCI) has announced a major change to India’s digital payment ecosystem—ending UPI pull transactions. This move is aimed at improving security and preventing fraud, but it also raises questions about how it will impact businesses and consumers.
Whether you’re a small business owner, a digital payment user, or a financial expert, this guide will break down why NPCI is making this change, how it affects you, and what you should do next.
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What Are UPI Pull Transactions?
UPI transactions come in two types:
- Push Transactions – The payer initiates the payment by scanning a QR code or entering a UPI ID.
- Pull Transactions – The recipient (merchant, individual, or service provider) requests money from the payer via ‘Collect Payment’ requests.
For example, if a shop owner wants to receive a payment, they could send a UPI request to the customer, who then approves the transaction.
Why Is NPCI Ending UPI Pull Transactions?
1. Rising Fraud Cases
Pull transactions have been widely exploited by scammers. Fraudsters trick users into approving fake payment requests, leading to financial losses.
- Over ₹125 crore lost to UPI fraud in 2023 (Source: RBI Report).
- 40% of fraud cases on UPI involved unauthorized pull requests.
By removing pull transactions, NPCI aims to make UPI safer for everyone.
2. Increasing Trust in Digital Payments
Security concerns have made many users hesitant to use digital payments. Removing the risky pull method will boost confidence in UPI transactions.
3. Encouraging Secure Payment Methods
Most businesses already use QR code-based UPI payments, which are safer. NPCI wants to promote ‘push’ transactions, where only the payer can initiate payments.
4. Aligning with Global Best Practices
Globally, real-time payment systems like India’s UPI, Brazil’s PIX, and the UK’s Faster Payments focus on push transactions for security and efficiency.
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Who Will Be Most Affected?
1. Small Businesses & Local Merchants
- Merchants who rely on UPI collect requests must switch to QR codes or UPI IDs.
- Solution: Adopt QR-based payments to ensure seamless transactions.
2. Subscription-Based Services & Billers
- Platforms using UPI pull for bill payments & subscriptions will need to adjust.
- Solution: Use auto-pay (UPI Mandates) or encourage push payments.
3. Peer-to-Peer (P2P) Transactions
- Users who frequently send payment requests for splitting bills, rent, etc., may find this inconvenient.
- Solution: Use direct transfers instead of collect requests.
4. Digital Lending & Microfinance Institutions
- Lenders who collect EMIs via UPI pull requests need alternative solutions.
- Solution: Implement UPI AutoPay or NACH debit mandates.
What Should Users & Businesses Do?
1. Switch to Push Payments
The best alternative is QR code-based payments and direct UPI ID transfers. These methods ensure secure, user-initiated transactions.
2. Verify Every UPI Request
Even though pull transactions are being phased out, always:
- Check sender details before approving a request.
- Avoid clicking on unknown links asking for UPI approvals.
3. Use UPI AutoPay for Recurring Payments
If you pay utility bills, subscriptions, or EMIs, switch to UPI AutoPay, which allows secure, automated payments.
4. Educate Employees & Customers
Businesses should:
- Train staff on the new UPI changes.
- Update customers about secure payment options (like QR codes).
5. Monitor NPCI Announcements
Stay updated with official announcements from NPCI to understand further policy changes and deadlines.
(FAQs)
1. When will NPCI officially end UPI pull transactions?
NPCI has not announced a specific date, but implementation is expected in 2024 in phases.
2. Will this affect my UPI transactions as a consumer?
No major impact, as most UPI payments use QR codes or direct transfers. Only ‘Collect Payment’ requests will be phased out.
3. What if I receive a UPI collect request after the change?
Most collect requests will be disabled, but verified merchants may still use them for limited cases like bill payments.
4. What is the best alternative for businesses?
Businesses should adopt UPI QR codes or direct UPI ID payments for a seamless experience.
5. Will online bill payments be affected?
No, UPI AutoPay will continue to work for utility bills and subscriptions.
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