National Payments Corporation of India (NPCI) is preparing major measures to increase security in digital transactions, especially in the UPI platform. In a bid to lower fraudulent transactions, NPCI is mulling over modifications in the processing of transactions through UPI.
Phasing Out 'Collect/Pull Requests'
Part of its plan is to discontinue the 'collect/pull request' process. This process is widely employed by merchants to make a request to customers for payments. Talks with banks and stakeholders are in progress to introduce this change.
What is a 'Collect/Pull Request'?
In this method:
- After completing a purchase, the merchant may request your UPI-linked phone number.
- You receive a collect/pull request from your UPI app or in the form of a short message.
- Once you authorize the request and enter your UPI PIN, the payment is made.
Also, certain businesses employ this method for auto-debit transactions, e.g., monthly or yearly subscription fees. Needless to say, fraudsters have taken advantage of this system to cheat users, leading to NPCI increasing security levels.
The Alternative: Push Transactions
If the 'pull request' process is eliminated, customers would have to transition to the 'push' process for payments. In this process:
- Customers need to physically transfer funds from the account to the merchant or receiver.
- This is either through entering the receiver's mobile number or scanning a QR code to make payment.
Experts point out that 'push transactions' are secure and would substantially curb fraudulent practices.
Effect on Auto Debit and Recurring Payments
The abolition of the 'pull/collect request' system can impact services such as auto-debit and recurring payments. But NPCI is likely to implement an alternate solution to make it convenient for users.
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