In today’s fast-moving digital world, the payments and finance landscape is constantly transforming. Gone are the days when you had to carry bulky wallets and fumble for cash; in their place, digital payment systems have emerged as the new alternative. Among all the recent innovations in the payment ecosystem, the Unified Payments Interface (UPI) tops the list in India, offering a seamless and efficient means of transferring money.

What is UPI?

The Unified Payments Interface (UPI), introduced by the National Payments Corporation of India (NPCI) in 2016, is a real-time payment system enabling seamless, instant, and secure transactions between banks and various payment service providers through a single platform. Since its inception, UPI has grown exponentially, processing billions of transactions every month. With its user-friendly interface and interoperability, UPI has transformed how we transact, allowing individuals from all walks of life to engage in cashless transactions effortlessly. In August 2023, UPI achieved an impressive milestone of more than 10 billion transactions in a month.

UPI and security

The recent launch of new products by NPCI has increased the importance of implementing robust security measures. The new gamut of products, such as Credit Line on UPI, UPI LITE X, Tap & Pay, and Hello! UPI: Conversational Payments on UPI and BillPay Connect: Conversational bill payments are designed to build an inclusive, resilient, and sustainable digital payment ecosystem. According to the Reserve Bank’s Annual Report 2022–23, the number of frauds in the banking sector increased year-on-year to 13,530 last year.

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Ways to secure UPI

The bedrock of UPI’s security architecture lies in its multi-factor authentication system. When you set up a UPI account, you link it to your mobile number, bank account, and a UPI Personal Identification Number (UPI-PIN). This multifactor authentication ensures that only the account holder can initiate transactions, thus mitigating the risk of unauthorised access. Moreover, each transaction requires a UPI-PIN, acting as an additional layer of security.

Ingenious cybercriminals can intrude on even the most sophisticated security measures. Users need to stay vigilant and informed about potential threats. Phishing attacks, where fraudsters pose as trusted entities to obtain sensitive information, are one of the most common risks associated with UPI. These malicious players send deceptive emails, messages, or calls, urging recipients to share their UPI-PIN or other personal information. To combat such threats, users must exercise caution and verify the authenticity of any communication requesting sensitive data.

Another prevalent threat is malware and spyware designed to compromise your device’s security. These malicious programmes can intercept your UPI transactions and steal confidential information. Regularly updating your device’s operating system and using reputable antivirus software can help safeguard against such threats.

Moreover, it is essential to use a secure and reliable UPI app provided by a reputable bank or financial institution. These apps typically undergo rigorous security testing and are equipped with encryption technology to protect your data during transmission. Avoid downloading UPI apps from unofficial sources or using third-party applications that may compromise your security.

NPCI and banks have also been proactive in enhancing UPI security. They employ advanced fraud detection systems that analyse transaction patterns to identify and flag suspicious activities. Furthermore, they have implemented strict Know Your Customer (KYC) procedures to verify users’ identities before they can transact on the UPI platform.

As technology continues to evolve, so do the tactics of cybercriminals. Hence, users must educate themselves about emerging threats and stay updated on security. Also, promptly reporting any suspicious activity to your bank or the relevant authorities can play a significant role in avoiding cybercrime.

Bottomline

UPI has revolutionized how we handle finances, making transactions faster and more convenient. However, this digital age convenience must not come at the expense of security. We have platforms that have come up that give a superior user experience as we manage fraud risk and the speed at which a transaction happens. Users and stakeholders must work in tandem to ensure that UPI remains a trusted and secure platform.

(By Animesh Jha, Vice President, Engineering – Fraud & Risk Management, Wibmo, a PayU company. Views are personal)