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Preventing UPI Frauds in India

Jul 3, 2023

5 min. Read

Preventing UPI Frauds in IndiaRisk

Preventing UPI Frauds in India

UPI, or Unified Payments Interface, has taken over the world by making it convenient to pay for anything. It’s this convenience that has made it a hot trend in the present day. However, with its ever-increasing popularity comes a risk of falling prey to fraudulent schemes, which is increasing daily. Therefore, knowing what UPI ID is, its relevance, and how fraudsters can misuse it to fulfil their malicious intentions has become imperative. So, without further ado, let’s proceed.

What is UPI ID?

What is the meaning of UPI ID? Well, Unified Payments Interface, or UPI as it is popularly known, combines multiple financial services and features into one app system. Because of UPI ID, sending and receiving money is a piece of cake. All you need to do is a UPI ID and PIN. Each UPI ID is unique to a specific user and helps the bank to identify them, and the structure is usually like username@bank’s initials. This unique system makes it easier to keep track of monetary transactions and payments that people make with their UPI ID.

With UPI ID, one can do various transactions without involving savings accounts, net banking apps, or debit cards. You can also pay your bills and merchants. Furthermore, you can also transfer money to different accounts without the need to reveal your account information.

Since we have understood what UPI ID is, let’s discuss the benefits of UPI ID.

Benefits of UPI ID

UPI is probably the best thing that has happened in the field of payments and transactions. There are many benefits of UPI ID.

Free Transaction: You will not be charged any fee for transactions via UPI ID, whether a bill payment or an account transfer.

24X7 Availability and Instant Transfer: The second benefit of UPI ID is that you can make an instant transfer 24X7, unlike IMPS, which takes 30 minutes, and NEFT, which can take up to 12 hours.

Smooth and Easy to Use: One of the most essential benefits of UPI is the simplicity and smoothness that comes with UPI payments. While paying the merchant, you can scan the QR or enter your Virtual Payment Address and PIN to make the payment. To transfer funds, choose the payee in your UPI app and enter MPIN to make the payment.

It is Universal: Another benefit is that you don’t need different UPI for different bank accounts. You can do bank transfers with a single UPI app, as you can access all your bank accounts through the same app.

A valuable Alternative: UPI ID reduces the hassle of using your debit card, internet, and mobile banking to make any payment. Also, it eliminates the need to run to the ATM whenever you need to pay someone.

Better Than Wallet: When you use UPI to send money to a bank account, it stays in the same account, enabling you to earn interest on that money that wallets don’t offer.

We now know what UPI ID is and the benefits of UPI ID; let’s see how to set it up.

Steps to Set UP UPI ID

To set up a UPI ID:

• Download the UPI app from Apple App Store or Google Play Store.

• Choose your preferred language.

• Enter the phone number that you want to link.

• To authorise, enter the OTP you receive on your phone.

• Enter the required details, such as your account number, to link the account.

• Create a PIN to authorise all future UPI transactions.

• Your account is now activated.

UPI has many benefits but is only one face of the coin. Many fraudulent attempts are thriving in the background. So, it is vital to identify and prevent them. The first step is identifying the types of UPI frauds fraudsters commit.

Types of UPI Frauds

UPI frauds come in different forms. Fraudsters devise various ways to bypass security measures and exploit the victims. Sometimes, it may seem unavoidable and scary, but you can identify and prevent them with vigilance and precaution.

Sim Cloning: In this type of scam, fraudsters send you an OTP. When you share this OTP, your SIM gets cloned. The criminals obtain your personal information and then change your UPI details to scam you.

Fake Calls: Sometimes, fraudsters pose as bank representatives, asking for sensitive information such as UPI PIN, bank account number, etc., which they use for malicious purposes or sell the data to a third party.

Malware: Here, cybercriminals send you a phishing email containing infected links. When clicked, these links will take you to unsecured sites, where the hacker will steal your sensitive information for illicit purposes.

Fraud Sellers: This type of fraud has become a common fraudulent practice. Cybercriminals place their phone numbers on legitimate business websites. So when you purchase something, they request prepayment via UPI transaction. Your product never arrives, and the money gets deducted. Furthermore, the fraudsters get a chance to hack your UPI account.

Money Mule: Here, fraud rings hack your UPI information and collect money. They store the money in a separate account, a money mule, where it gets deposited from different sources.

UPI Frauds Secure

There are a few ways through which you can prevent UPI fraud. They are:

• Install anti-virus and anti-malware on your laptop and phone.

• Look for customer support numbers on the official website instead of Google.

• If you receive any payment request from an unrecognised account, do not accept it.

• Do not give OTP or UPI PIN to anyone.

• Do not click any suspicious links or install questionable apps because the chances are that you will fall prey to online fraud.

UPI has become one of the most convenient and advantageous modes of online payment in today’s digital world. However, you must always take precautions while making a payment. Even if some mishap happens, please report it to your concerned banking institution and the closest cybercrime centre.


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