UPI Fraud Hits One in Five Families Across India
A recent survey has revealed a worrying trend in India’s growing digital payment space. One in every five Indian families using UPI (Unified Payments Interface) has faced fraud at least once since 2022. The survey, conducted by LocalCircles between March and June 2025, covered over 32,000 participants from 365 districts across the country. These findings raise serious concerns about the safety of India’s most popular payment method.
UPI has made it easy for people to send and receive money using their mobile phones. Transactions happen instantly, and there is no need to carry cash or visit a bank. However, this ease has also made it a favorite target for scammers.
Out of those who fell victim to fraud, half said their UPI PIN or app settings were hacked, allowing thieves to carry out unauthorized transactions. Another 40% said they lost money after clicking on fake payment links received via SMS, WhatsApp, or other social media platforms. In many cases, people were tricked through more than one method, such as QR code scams or fake calls from fraudsters pretending to be bank officials.
Even though there are ways to report such crimes, more than 51% of the affected users did not file a complaint. Many said they didn’t know how or found the reporting process too confusing. Others simply did not believe their complaint would make a difference.
₹1,087 Crore Lost to Digital Frauds in One Year
Digital payment frauds have become a major problem across India. According to the Reserve Bank of India (RBI), more than 56% of all banking frauds in the financial year 2024 were related to digital transactions, especially UPI. In total, the country reported over 1.34 million digital payment frauds that year, leading to losses of more than ₹1,087 crore.
Fraudsters used several tricks to deceive people. Some scams involved sending fake payment links or QR codes that secretly gave access to the user’s bank details. Others used panic and urgency over phone calls to convince people to share confidential information like their UPI PIN or OTP.
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While tools like the National Cybercrime Reporting Portal and helpline 1930 are meant to help victims, a large number of people still don’t report the fraud. This shows that many users are not aware of the right steps to take or lack trust in the system.
Security experts say that the rapid growth of UPI has made it a common target for cybercriminals. They recommend that users never share their UPI PINs or OTPs with anyone, avoid clicking on suspicious links, and only install UPI apps from official app stores. They also advise people not to use public Wi-Fi for financial transactions, as it can be easier for hackers to access data on open networks.
RBI and NPCI Roll Out Major Safeguards From June 30
Fraud cases are rising fast. To fight this, the RBI, NPCI, and Ministry of Finance have made new rules. These will start on June 30, 2025. One key rule is for all UPI apps. They must show only the bank-registered name of the person receiving the money. This will help users avoid scams. Many fraudsters trick people using fake or similar names. The new rule aims to stop that.
To further protect users, UPI apps will now include improved fraud detection systems powered by artificial intelligence. These systems will watch transactions in real-time and detect any unusual behavior that could signal fraud. If something suspicious happens, the system can take quick action to block the transaction or alert the user.
The new safeguards also include device binding, which means UPI apps will work only on verified phones. Banks and payment platforms will enforce two-factor authentication more strictly to prevent transaction hijacking. They will also strengthen daily transaction limits to reduce financial losses in case of a scam.
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Authorities are also encouraging the use of biometric verification like fingerprint or facial recognition for better protection. All UPI apps will also go through tighter security checks to identify and fix any weak spots.
Banks have also been asked to tighten their customer verification process using Aadhaar-based eKYC and smarter tracking of account behavior. This will help stop fraud accounts before they can cause harm.
UPI now handles over 185 billion transactions each year and accounts for more than 83% of India’s total digital payment volume. To protect millions of users, authorities consider these new steps essential. They aim to make users feel more secure through stronger rules, improved technology, and greater awareness.
