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Fraud incidents rising with surge in UPI transactions

UPI-based transactions, which have witnessed over four-fold rise each in quantity and worth phrases during the last two years, have additionally been reportedly witnessing a surge within the variety of frauds.   

UPI (Unified Funds Interface) is mainly an prompt real-time fee system developed by Nationwide Funds Company of India (NPCI) facilitating inter-bank peer-to-peer and person-to-merchant transactions.

As on March 2020, there have been 125 crore UPI primarily based transactions amounting to shut to Rs 2.1 lakh crore in worth phrases. This elevated to round 540 crore transactions amounting to Rs 9.6 lakh crore in worth phrases in March 2022, NPCI information suggests.

Given the massive enhance in transaction volumes on the UPI platform, trade watchers say UPI frauds now account for many of the cyber fraud incidents, although numbers have been laborious to return by.

In response to information accessible in Reserve Financial institution of India’s newest development and progress report, through the interval April-September 2021-22, the overall variety of frauds in numerous banking operations primarily based on the date of reporting elevated to 4071, as in opposition to 3499 reported in similar interval final 12 months. Nevertheless, the quantity concerned in such frauds declined to Rs 36,342 crore (Rs 64,261 crore) throughout mentioned interval. The variety of card or web associated frauds additionally elevated marginally to 1,532 amounting to Rs 60 crore throughout April-September 2022, as in opposition to round 1,247 frauds amounting to Rs 49 crore similar interval final 12 months. 

“When it comes to space of operations, an awesome majority of instances reported throughout 2020-21 by way of quantity and quantity concerned associated to advances, whereas frauds regarding card or web transactions made up 34.6 per cent of the variety of instances,” the RBI report mentioned.

In response to Manish Agrawal, Head – Credit score Intelligence and Management, HDFC Financial institution, UPI’s easy and secured structure make it “distinctive” and there may be hardly any vulnerability within the system. The frauds occur because of the vulnerability within the minds of customers which fraudsters benefit from. 

Almost 65-75 per cent of UPI frauds occur throughout peak enterprise hours between 7AM and 7PM. The common ticket dimension of such fraudulent transactions are sometimes low with round 50 per cent of frauds being lower than Rs 10,000, whereas solely one-to-two per cent have been transactions of Rs one lakh and above.

Greater than 60 per cent of UPI fraud victims are salaried people and practically 75-85 per cent of the victims are within the age bracket of lower than 45 years, he mentioned.

Additional, greater than 50 per cent of UPI frauds are in metropolitan areas, whereas rural geographies account for lower than seven per cent.

Agrawal mentioned prospects mustn’t obtain third celebration apps for decision of complaints; mustn’t reply to or click on unverified hyperlinks despatched by unknown individuals/establishments by way of SMS/WhatsApp and will by no means share delicate banking particulars akin to UPI PIN, debit/bank card quantity, CVV and many others.

Revealed on

Might 14, 2022

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