Certain fintech companies are offering their services via third-party authentication of users through their UPI Ids, which is unauthorised by the NPCI and the central bank
Earlier this month, NPCI mandated the shut down of such services through a letter to the fintech operators
NPCI pointed out that UPI APIs are strictly to facilitate UPI payments for customers and for required verification of users for fraud prevention
The National Payments Corporation of India (NPCI) is reportedly pulling out all stops to curb misuse of virtual IDs generated for UPI transactions in various fintech platforms.
As per ET’s report, certain fintech companies are offering their services via third-party authentication of users through their UPI Ids.
This method of verification is unauthorised by the NPCI and the central bank, as per the rules for entities operating on the retail payment network, said the report citing sources familiar with the matter.
Earlier this month, NPCI mandated the shut down of such services beyond payments and settlements rendered by these companies, through a letter to the fintech operators.
“NPCI has observed instances of unauthorised use of UPI APIs by certain participants,” the report quoted the NPCI’s letter, and it further said, “the UPI APIs provided by NPCI are strictly for the purpose of facilitating UPI payments for customers and for required verification of users for fraud prevention. These APIs must not be used independently for any other purposes other than the above mentioned.”
This comes weeks after NPCI was considering raising the market share cap for UPI apps from the proposed 30% to allow more than 40% market share, based on reports.
Furthermore, NPCI has also occupied itself with helping other nations such as Peru, Namibia, Trinidad and Tobago, to adopt UPI-like payment systems in their region, in the last few weeks.
Meanwhile, Reserve Bank of India (RBI) governor Shaktikanta Das launched two new fintech productsUPI Circle and Bharat BillPay for Business (BBPS), in August. While the former allows UPI users to delegate payments either in full or partial to trusted secondary users, the latter enables companies to automate various invoice payment processes.
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