New UPI Transaction Rules from April 1 Biometrics and OTP Mandatory for Safety

UPI Transaction Rules: A major transformation is imminent in the world of digital payments across India. Starting from April 1st, the Reserve Bank of India (RBI) and the Government of India are set to enforce stricter security protocols for Unified Payments Interface (UPI) transactions. If you are a user of apps like PhonePe, Google Pay, Paytm, or BHIM, it is crucial to stay updated with these new guidelines to avoid disruptions during financial transfers.

These stringent measures are being introduced primarily to combat the rising tide of cyber fraud and to ensure the absolute safety of users’ hard-earned money. Below is a detailed breakdown of the upcoming changes.

Why the Rules are Changing

With the advancement of technology, cybercrimes have also become more sophisticated. Fraudsters are using deceptive methods, such as fake gas subsidy schemes or KYC updates, to install malware or harmful APK files on victims’ smartphones. This allows hackers to gain control of the device and drain bank accounts without the user’s knowledge. To counter this, the Ministry of Home Affairs and the National Payments Corporation of India (NPCI) have decided to implement a ‘Two-tier security’ system.

The New Security Process Explained

Previously, entering a PIN was sufficient to transfer money. Under the new regime, additional layers of verification are being added:

• Biometric and Face Scan: After entering the amount and clicking ‘OK’, users will now have to verify their identity using biometric authentication. This involves matching a fingerprint or performing a face scan via the smartphone.
• Dynamic OTP: Once the biometric verification is successful, a 6-digit One Time Password (OTP) will be sent directly from NPCI to the customer’s registered mobile number and email.
• Strict Time Limit: A critical aspect of this new rule is the time constraint. The OTP received will be valid for only 30 seconds. If the user fails to enter the password within this window, the transaction will be cancelled, and the entire process must be restarted.
• Final Deduction: Money will be debited from the account only after both the App PIN and the new dynamic OTP are correctly entered.

Stricter Monitoring for International Transactions

According to reports from the Indian Cyber Crime Coordination Centre (I4C), organized cyber fraud rings operating from countries like Thailand, Nigeria, and Myanmar pose a significant threat. To address this, international UPI transactions will see tighter controls:

1. Location Tracking: For UPI transactions not involving credit or debit cards, the system will scan the real-time location of both the sender and the receiver.
2. Consent and Captcha: As an added security layer, users will receive a notification seeking consent for the transaction, and filling out a Captcha will be mandatory.

These rules are expected to come into effect this April. While the new process might add a few seconds to your payment time, experts believe this is a necessary step to build a robust shield against online financial fraud.