The government is reportedly mulling over a new process that will likely impact users of the Unified Payments Interface (UPI). The plan is to introduce a minimum time frame for the first-time online transaction between two people in a bid to reduce fraud through a digital payment interface.
In the case of its introduction, users could experience a four-hour delay for transactions that are more than Rs 2,000. So, a four-hour time limit would apply whenever an individual makes a first-time payment of more than Rs 2,000 to another user with whom they have never transacted prior to this.
While the approach is likely to add some complexity to digital payments, it is believed to be a necessary step to address concerns of cybersecurity concerns.
Apart from the UPI, the initiative could apply to various other digital payment methods, such as Immediate Payment Service (IMPS) and Real-Time Gross Settlement (RTGS), among others.
Furthermore, the objective is not just to slow down or restrict the first-time transaction when an individual opens an account, as some digital payment systems already have some form of this practice. The main idea is to monitor and manage each first-time transaction between two individuals closely, irrespective of their past transaction history.
Currently, when an individual creates a new UPI account, they can send a maximum of Rs 5,000 within the first 24 hours.
At the same time, for National Electronic Funds Transfer (NEFT), after an individual adds a beneficiary, it is possible to transfer up to Rs 50,000 (either in full or parts) within the time frame of initial 24 hours.
As per the proposed plan, a four-hour time limit may apply whenever a user initiates the first-time payment of more than Rs 2,000 to another individual with whom they have never transacted before.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.
