India Tightens Regulations to Combat Digital Payments Fraud

India has escalated its crackdown on digital payment fraud with stringent new measures aimed at curbing the surge in scams. Regulatory bodies, including the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), have introduced sweeping changes to the banking and payments infrastructure following a sharp rise in fraudulent activities.

Fraud incidents linked to Unified Payments Interface (UPI) more than doubled from 7.25 lakh ($8,700) to 13.42 lakh ($16,200) cases in fiscal year 2023-24. Losses ballooned from ₹573 crore ($69 million) to ₹1,087 crore ($131 million) over the same period. The RBI has mandated risk-based authentication for high-value transactions, while NPCI has directed banks and payment apps to block pull or collect requests on UPI by October 1, 2025—a MOVE targeting a common fraud vector.

Starting April 1, 2026, all digital payments will require two-factor authentication under new RBI guidelines. The framework does not prescribe specific methods but emphasizes enhanced security protocols. These measures reflect India’s aggressive stance on safeguarding its rapidly growing digital economy.