It’s inevitable to know as to how these rules would impact your pocket. The National Payments Corporation of India (NPCI) has introduced new guidelines to enhance the security and efficiency of Unified Payments Interface (UPI) transaction and these are applicable wef 1st April 2025 in India. NPCI is accelerating its expansion efforts with plans to establish a state-of-the-art research and development (R&D) centre in Mumbai, designed to accommodate up to 5,000 employees which can serve as a hub for digital payments and financial technology innovation.

Key updates include:

Weekly Mobile Number Updates:  NPCI has made it obligatory for banks and PSPs to update mobile number records weekly through the Mobile Number Revocation List (MNRL) and Digital Intelligence Platform (DIP). to prevent transaction errors due to inactive or reused numbers. These are requirements for all member banks of UPI, Payment Service Providers (PSPs), and third-party app providers (TPAPs), such as leading apps like PhonePe, Google Pay, and Paytm.

Deactivation of Inactive UPI IDs:  UPI IDs linked to dormant mobile numbers will be deactivated, making it essential for users to ensure their registered mobile numbers are active. According to the Department of Telecommunications (DoT), mobile numbers that have remained unused for 90 days can be reassigned to new customers. 

Stricter Consent Mechanisms: Users must explicitly opt-in for UPI number seeding, and consent cannot be captured during transactions.

Limitations on Collect Payments: NPCI is also removing the “Collect Payments” feature from UPI because of fraud issues. This feature will now be limited to large, authenticated merchants only, and person-to-person collect payments will be limited to ₹2,000.

Mandatory Reporting: PSPs must report cases where they locally settle UPI numbers because of system lag.

These changes aim to:

Reduce transaction processing errors

Prevent unintended money transfers

Enhance user trust and operating efficiency

Improve overall customer experience

To comply with the new guidelines, users should:

Ensure their registered mobile numbers are active and up-to-date

Update their bank records with active mobile numbers

Be aware of the limitations on collect payments and reporting requirements

In a Nutshell, these updates are part of the NPCI's efforts to strengthen India's digital payment infrastructure and promote financial inclusion.