The National Payments Corporation of India (NPCI) has announced new regulations for Unified Payments Interface (UPI) number-based transactions, set to take effect from April 1, 2025. As part of these changes, banks and Payment Service Provider (PSP) apps must update mobile number records on a weekly basis to minimize transaction errors.
Under the revised guidelines, banks, PSPs, and third-party UPI service providers—including PhonePe, Google Pay, and Paytm—must comply with specific measures regarding numeric UPI IDs. A key requirement is that UPI users must explicitly opt in for their UPI numbers to be linked, ensuring a transparent and user-controlled consent process. Notably, consent cannot be obtained before or during transactions, reinforcing data integrity and user autonomy.
All entities within the UPI ecosystem, including banks, payment apps, and third-party providers, are required to integrate these modifications by March 31, 2025. The updated framework is designed to enhance security, reduce fraudulent transactions, and improve the overall user experience in UPI payments.
Additionally, the regulations allow PSP apps to locally resolve UPI numbers if NPCI’s system experiences response delays. However, such instances must be documented and reported on a monthly basis to ensure accountability and continuous improvement in the UPI ecosystem. This reporting mechanism is aimed at maintaining transparency and optimizing the efficiency of digital payment processes.
As a key driver of digital payments in India, UPI has witnessed remarkable growth in recent years. While the new guidelines do not specify transaction volume statistics, their implementation is expected to streamline operations, reduce errors, and boost user confidence in digital transactions.
Leading UPI platforms like Google Pay and Paytm will need to align their operational strategies with these regulatory updates to maintain compliance and competitiveness. Given their significant role in expanding UPI adoption across India, ensuring seamless integration with NPCI’s new framework will be crucial for sustaining their reliability and service efficiency.
