To curb fake or artificial
transactions in order to get cashbacks, NPCI has taken a serious action and
decided to halt this practice on its payments platform UPI.
From August 1, payments transfer
within same account or UPI ID (where the payer and the payee account are
actually the same) will be blocked by the umbrella organisation for all digital
payments in India.
The payments regulator has issued a
circular and strictly prohibiting those transactions from the aforementioned
date to avoid unnecessary load on the system.
The circular further added that NPCI
had asked payment service providers and banks to block such transactions at
their end.
NPCI also explained that these
transactions are being done between same UPI accounts or in some case from the
UPI ID to the account number, but the underlying account remains the same and
thirdly by sending money to another UPI ID but connected to the same bank account.
At a time when digital payments
platforms are fighting to gain highest UPI share, the crackdown from the
digital payments watchdog will affect their number of transactions.
The prime reason behind the
clampdown is to stop those customers who do multiple transactions within their
account to get cashback offers lured by UPI-led digital payments platforms such
as BHIM, Paytm, PhonePe, Mobikwik, Freecharge and others.
Additionally, this will reduce
failure rates of payments on UPI platform due to low-value and repeated
transactions.
The development comes on the heels
of NPCI’s recent circular to remove
Aadhaar-based payments functionality through UPI and IMPS. It
had asked all partner banks to remove the 12 digit biometric as a payments
option from their platform.
Of late, cashbacks and incentives
have been become a bone of contention for the aforementioned digital payments
players. Some of them have even questioned each other strategy to lure
customers and show a high number of transactions.
While Mobikwik targeted government-run BHIM to
offer cashbacks only to their own customers or BHIM UPI-enabled bank apps,
Flipkart-owned PhonePe had earlier questioned Paytm’s
UPI transaction numbers.
Following Mobikwik’s criticism, the
government withdrew incentive offers on
BHIM.
The move may discourage customers
who get cashbacks and incentives by doing multiple transactions directly or
indirectly influenced by digital payments players but it will definitely help
the government to control unnecessary transactions and false claims made by
these companies.
Comments
Post a Comment