Digital payment frauds in India surged over fivefold to 14.57 billion rupees ($175 million) in the year ending March 2024, compared to the previous year, according to the Reserve Bank of India's annual report released on Thursday. This sharp increase coincides with India's emergence as a digital payments powerhouse following the 2016 launch of the Unified Payments Interface (UPI), which enables instant money transfers via mobile phones.
RBI data reveals that the value of UPI transactions soared by 137% over the past two years to 200 trillion rupees. Additionally, affordable internet access and increased financial inclusion have contributed to the rise in digital payments across the country.
The growing popularity of digital payments creates a bigger target for fraudsters, said Nikhil Jois, head of growth at fraud detection platform Bureau. “Coupled with a lack of financial literacy and imprudent use of technology, vast population is rendered vulnerable to such attacks,” he said. “Fraudsters are getting sophisticated by the day, while financial institutions and fintechs, jostling for market share and growth, have loosened controls.”
The central bank has initiated numerous high-profile campaigns to educate consumers about financial frauds, including advertisements featuring Bollywood star Amitabh Bachchan cautioning users about the risks associated with online money transfers.
Digital payments, including card transactions and internet transactions, accounted for 10.4% of the total fraud amount, a significant increase from 1.1% in fiscal year 2023.