The National Payments Corporation of India (NPCI) has begun gradually eliminating the ‘Collect Payments’ feature from the Unified Payments Interface (UPI) platform to address growing fraud concerns, according to banking officials familiar with the matter.
The Economic Times reports that this pull-based payment method, which allows merchants to request money directly from users’ UPI apps, has become increasingly vulnerable to scams. Under the new directive, pull payments will be restricted to only large, verified merchants, while person-to-person collect requests will be capped at Rs 2,000.
“Pull transactions by merchants are very susceptible to fraud,” a banking executive told Economic Times on condition of anonymity. The typical scam involves fraudsters expressing interest in products sold online, promising UPI payment, then sending pull requests that victims mistakenly authorize, believing they’re receiving rather than sending money.
NPCI’s strategy aims to promote safer alternatives, particularly QR code-based payments and direct push transactions. This transition aligns with the organization’s broader goal of enhancing security across India’s rapidly expanding digital payments ecosystem, which has seen significant migration from traditional payment methods to UPI.
Major UPI applications like Google Pay and PhonePe are expected to benefit from the shift as more transactions funnel through their platforms. However, small merchants currently dependent on collect payment requests will need to adapt by implementing QR code systems through payment aggregators.
Banking officials cited by Economic Times indicate the transition will happen in phases to allow for adjustment across the ecosystem.
