India's digital payment sector has witnessed massive growth in recent years. People are using UPI (Unified Payments Interface) for everything from purchasing rations to paying for meals at expensive restaurants, railway tickets, hotel bookings, and more. However, alongside this growth, the number of related fraud incidents has also surged. Data released by the central government is highly concerning.
In response to a question in Parliament, Union Minister of State for Finance Pankaj Chaudhary revealed that UPI fraud cases have risen by 85% in 2023. In 2022-23, over ₹8.3 lakh crore worth of UPI transactions were recorded, amounting to nearly ₹14 lakh crore in value. However, during the same period, 7.25 lakh cases of fraud were reported, with a total loss of ₹573 crore.
Digital frauds have been increasing rapidly. In 2023-24, more than ₹13.1 lakh crore worth of UPI transactions were made, with a total of ₹20 lakh crore in value. Of these, 13.4 lakh fraud cases were reported, amounting to ₹1,087 crore in losses. Notably, between April and September this year, UPI fraud cases reached 6.32 lakh, resulting in ₹485 crore in losses.
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The Finance Minister claimed that several effective measures are being taken to curb the rising UPI frauds. Since March 2020, the Reserve Bank of India (RBI) has launched the Central Payment Fraud Information Registry (CPFIR), a web-based platform to report payment-related fraud incidents. All regulated institutions are required to report such frauds to this registry.
To combat UPI frauds and payment-related frauds, the government, RBI, and National Payments Corporation of India (NPCI) have taken several steps, including setting daily transaction limits, enforcing mobile number and PIN authentication, and more. Furthermore, NPCI has provided banks with fraud-monitoring solutions powered by AI and machine learning models to prevent fraud and enable them to reject suspicious transactions.
RBI and banks are also conducting awareness campaigns on cybercrime through small SMS and radio advertisements, as well as public outreach. In addition, the Ministry of Home Affairs has launched the National Cyber Crime Reporting Portal (www.cybercrime.gov.in) and the National Cyber Crime Helpline number – 1930.