RBI Focusses On Fraud Mitigation, UPI Auto-replenishment

The Reserve Bank of India (RBI) today announced a few important updates regarding payment systems and fintech

Digital Payments Intelligence Platform 
The Reserve Bank has implemented several measures to ensure the safety and security of digital payments over time, aiming to maintain public trust in these systems. 

There's a proposal to establish a digital payments intelligence platform, leveraging advanced technologies to mitigate payment fraud risks effectively. To advance this proposal, the RBI has formed a committee that is expected to provide its recommendations within a two-month timeframe. 

This platform has the potential to enhance the security landscape of digital payments, bringing in greater trust and adoption among consumers and businesses.

“Despite the diligent efforts of banks, National Payments Corporation of India (NPCI), card networks, payment aggregators, and payment apps to protect customers, there is a need for network-level intelligence and real-time data sharing. The RBI’s proposal to establish a digital payments intelligence platform, leveraging advanced technologies to combat payment fraud, is a significant step forward,” says Adhil Shetty, CEO, BankBazaar.com, a fintech company. 

FASTag Recurring Payments 
The existing e-mandate framework, established by the RBI on January 10, 2020, permits recurring transactions with fixed periodicity. A proposed extension aims to incorporate payments such as FASTag and National Common Mobility Cards (NCMC) balance replenishments, which lack fixed periodicity, into this framework. These payments occur as needed, hence, their replenishment lacks specific timing or amounts. 

The proposal suggests introducing an auto-replenishment feature under the e-mandate framework, triggered when FASTag or NCMC balances dip below a set threshold. 

UPI Auto-replenishment 
The UPI Lite feature currently permits customers to load their wallets up to Rs 2,000 and make payments up to Rs 500 from the wallet. To enhance the seamless usage of UPI Lite and in response to stakeholder feedback, a proposal is underway to integrate UPI Lite into the e-mandate framework. 

This integration involves introducing an auto-replenishment feature for loading the UPI Lite wallet when the balance falls below a user-defined threshold. Since the funds remain with the customer, moving from their account to the wallet, the need for additional authentication or pre-debit notifications would be eliminated. Further guidelines regarding this initiative are expected to be released soon.