The National Payments Corporation of India (NPCI) has issued a directive to various payment apps and banks to deactivate Unified Payments Interface (UPI) IDs and associated UPI numbers that have been inactive for more than a year. This move, which is to be implemented by December 31, 2023, aims to streamline and optimize the use of UPI IDs, ensuring that only actively utilized ones remain operational. The initiative is also a proactive step to enhance the efficiency and security of the UPI ecosystem.
The specific guidelines outlined in the NPCI circular include:
- Identification of Inactive UPI IDs: All Third Party App Providers (TPAPs) and Payment Service Providers (PSPs) must identify UPI IDs and associated UPI numbers and phone numbers of customers who have not performed any financial (debit or credit) or non-financial transactions for a period of one year.
- Disabling Inactive UPI IDs for Inward Credit Transactions: UPI IDs and UPI numbers of such customers will be disabled for inward credit transactions. Additionally, PSPs are required to deregister the same phone number from the UPI mapper.
- Re-registration for Customers: Customers with inward credit block UPI IDs and phone numbers will need to re-register in their respective UPI apps for UPI mapper linkage. They can continue to make payments and non-financial transactions using their UPI PIN as needed.
- Implementation of Requester Validation: UPI apps must perform Requester Validation (ReqValAd) before initiating ‘pay-to-contact’ or ‘pay to mobile number’ transactions. This ensures that the customer name shown during a transaction is accurate and prevents wrong fund transfers.
This decision was taken to prevent the inadvertent transfer of funds to unintended recipients when customers change their mobile numbers without disconnecting the old number from the banking system. It addresses the possibility that the old mobile number may be assigned to a new operator.
Before deactivating the users’ UPI ID, banks will notify the users through email or message. This initiative coincides with an announcement by the Reserve Bank of India (RBI) that UPI transactions had crossed 11 billion, highlighting the growth and importance of the UPI platform in India’s digital payment landscape.