In a proactive move to enhance the security and reliability of the Unified Payments Interface (UPI) ecosystem, the National Payments Corporation of India (NPCI) has issued a directive aimed at major third-party UPI apps such as Google Pay, Paytm, PhonePe, and others. The mandate, conveyed through a recent circular, requires these platforms and associated banks to deactivate UPI IDs and numbers that have remained inactive for over a year.
NPCI, a non-profit organization overseeing retail payments and settlement systems in India, emphasizes that this measure is essential to prevent unintentional fund transfers to unintended recipients. The risk arises when customers change their mobile numbers without unlinking the old ones from the banking system, as there is a chance that the old mobile numbers could be issued to new subscribers.
The Supreme Court's recent ruling has underscored that mobile service providers cannot be restricted from reallocating deactivated or disconnected numbers to new subscribers after the statutory 90-day period.
According to the new guidelines outlined in the circular, third-party app providers (TPAPs) and payment service providers (PSPs) are mandated to take the following actions and implement them by December 31, 2023.
1. All TPAPs and PSP banks have been asked to identify UPI IDs and associated UPI numbers and phone numbers of the customers who have not performed any financial (debit or credit) or non-financial transactions for 1 year from the UPI apps.
2. UPI IDs and UPI numbers of such customers shall be disabled for inward credit transactions. This means that they will not be able to receive money on these numbers. Further, PSPs shall deregister the same phone number from the UPI as well.
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