UPI Alert!, Banks Must Update Numeric ID Resolution by 31st March 2025, as per NPCI’s new Guidelines.
Hello guys there’s a piece of news for you, the National Payments Corporation Of India (NPCI) has a crucial add-on to its previous guidelines on Numeric UPI ID resolution. This means the NPCI has brought a change in guidelines to UPI ID resolution for banks, Payment Service Providers (PSPs), and third-party UPI apps.
In which all banks, payment service providers, and third-party apps must follow or obey the new guidelines related to UPI ID resolution until 31 March 2025.
This newly updated guideline from NPCI ensures greater security, accuracy, and transparency in India’s digital payment system.
The numeric UPI ID resolution process changes will take effect from 1st April 2025, in which UPI stakeholders must enhance or improve their mobile number resolution to prevent transaction errors and enhance the fraud detection system.
What is Numeric UPI ID & Why They Need an Update?
A Numeric UPI ID is a unique combination of numbers assigned to users for completing transactions on the Unified Payments Interface (UPI) network.
Unlike regular UPI IDs that include a unique combination of letters and numbers (e.g. name@bank), numeric UPI ID is given by the banks that are identified easily and for completing faster transactions.
Why is NPCI Applying These Changes?
- Mobile Number Recycling Issue: Most telecom operators frequently recycle their deactivated or unused mobile numbers, sometimes this may cause problems while making payments or may be sent to the wrong UPI ID.
- Fraud Prevention: Most of the time fraud occurs due to unauthorized access to old UPI IDs which are linked to previous mobile numbers.
- Reducing the Risk of Transaction Failures: Enhance the accuracy of UPI ID resolution will decrease the failed transactions and incorrect fraud transfers.
- Enhance User Experience: With the updation of these guidelines, users may only receive relevant and non-intrusive messages when updating their UPI IDs.
NOTE: The new guidelines help users to make a secure and efficient environment for UPI transactions.
What Guidelines are Updates on Numeric UPI ID Resolution by NPCI?
➡️Weekly Updates For Churned Mobile Numbers
- The Banks, PSPs, and UPI Apps have to use the Mobile Number Revocation List/Digital Intelligence Platform and must regularly update their records to remove those UPI IDs that are linked to the non-assigned or deactivated numbers.
- The update must happen at least once every week to prevent consumers from sending payments to outdated UPI IDs.
- Banks can reduce incorrect or fraudulent transfers by ensuring accurate mapping.
➡️Improved Error Reduction Mechanism
- Financial Institutions should have set up systems that check numeric UPI IDs before processing transactions.
- Remember if the user’s UPI ID is not linked with the churned mobile number detected then the ongoing transactions should either be blocked or require re-verification.
- This process will significantly stop the misdirected transactions caused by incorrect mappings.
➡️Clear & Transparent Users Communication
UPI Apps Should Not:
- Do not use misleading or forceful messages regarding numeric UPI ID Updates.
- Avoid requesting unnecessary user consent during transactions.
- Clearly inform users about UPI ID updates without confusing users.
➡️Explicit User Consent for UPI Number Seeding & Porting
- Users should not be tricked into thinking they need to take unnecessary steps to keep their UPI ID.
- When a UPI ID is transferred or Updated, Apps must ensure that:
- Users receive clear notifications
- And are not to pressured into reseeding their UPI ID if it is still valid.
➡️Local Resolution of UPI Numbers for Faster Transactions
- Payment Service Providers can resolve UPI numbers locally if NPCI’s central UPI resolution system is delayed, but they must report these cases to NPCI every month.
➡️Mandatory Monthly Reporting to NPCI
Banks and PSPs have to submit a monthly compliance report that includes:
- Total UPI Seedings
- Active Unique UPI users
- Total Customer Mobile Identifier transactions.
- Total transactions must resolved locally instead of via NPCI
Why This Update Crucial for UPI Users & Businesses?
With India’s UPI transactions crossing billions every month, maintaining smooth interoperability is crucial. The new rules from NPCI aim to reduce payment failures, prevent number mapping errors, and enhance the user experience for both UPI users and businesses.
Impact on Banks, PSPs & UPI Users?
👉 Impact on Payment Service Providers
- Strict Compliance Requirements: Banks must need to update their mobile number databases and use real-time validation.
- Technical System Upgrades: Payment Service Providers need to upgrade their backend systems to follow NPCI’s new resolution mechanism. And they have to add fraud detection tools to monitor suspicious activities.
- Faster UPI Number Resolution: Resolving UPI numbers locally leads to minimizing transaction delays, but PSPs must keep a detailed log of local resolutions for NPCI audits.
👉 Impact on Finance Companies and UPI Apps
- Better Communications Policies: Banks must to avoid intrusive and unwanted messages regarding UPI ID updates because NPCI has strictly informed that no unnecessary prompts should not displayed during transactions.
- Better Fraud Prevention: Removing of the churned mobile numbers will help fintech companies to prevent fraud-linked to old UPI IDs.
- Monthly Reporting: Monthly reports ensure accountability by requiring UPI apps to maintain detailed transaction reports.
👉 Impact on UPI Users
- Minimizes Misrouted Transactions: After this guideline upgrades users will not face any misrouted payments that are made on the unknown recycled numbers.
- Better UPI ID Management: Users will receive notifications related to their UPI ID updates, without unnecessary changes.
- More Transparency in UPI Apps: UPI apps provide simple alerts for updates, ensuring a smooth experience.
