UPI P2P Collection Requests to be Discontinued from Oct 1, 2025
- THE MAG POST
- Aug 25
- 4 min read
The Unified Payments Interface (UPI) has revolutionized digital transactions in India, making payments seamless and accessible for millions. However, this convenience has also attracted malicious actors, leading to a rise in digital payment frauds. In response, the National Payments Corporation of India (NPCI) has announced a significant policy change: the discontinuation of person-to-person (P2P) collection requests, effective October 1, 2025. This proactive measure aims to fortify the UPI ecosystem against fraudulent activities, ensuring a safer digital financial experience for all users.
This strategic pivot is not merely a procedural update; it represents a critical step in safeguarding the integrity of India's rapidly expanding digital payment infrastructure. By eliminating a key vulnerability, the NPCI is reinforcing its commitment to user security and trust, a cornerstone for sustained growth in the digital economy. Understanding the implications of this policy change is crucial for every UPI user and stakeholder as we navigate towards a more secure digital future.
Navigating the New UPI P2P Collection Request Policy
The digital payment landscape in India is set for a significant shift as the National Payments Corporation of India (NPCI) has mandated a halt to P2P (person-to-person) collection requests on the Unified Payments Interface (UPI) starting October 1, 2025. This strategic move aims to bolster user security and curb the rising tide of digital payment fraud that has plagued millions of UPI users across the nation.
Understanding the Mechanics of UPI P2P Collection
Currently, the UPI system allows users to initiate a 'collect request' to another user. Upon the recipient's approval and entry of their UPI PIN, funds are transferred from the requester's account to the collector's. This mechanism, while convenient for many peer-to-peer transactions, has also become a fertile ground for fraudulent activities.
The Evolution of P2P Collection and Fraud Prevention
In the nascent stages of UPI, 'collect requests' were frequently exploited for scams. To combat this, NPCI initially capped the transaction limit for such requests at ₹2,000. This measure significantly curbed the incidence of fraud, reducing the proportion of 'pull' transactions to a mere 3% of all UPI activities. Despite these efforts, the sheer volume of UPI transactions means that even a small percentage of fraudulent cases can amount to substantial financial losses for users.
Analyzing the Escalating Trend of UPI Frauds
The data paints a concerning picture of the increasing sophistication of digital payment frauds. In the Financial Year 2022-23, over 7.25 lakh UPI fraud cases were reported, totaling approximately ₹573 crore. This alarming trend escalated in FY 2023-24, with reports surging to 13.42 lakh cases, amounting to a staggering ₹1,087 crore. The current year has already seen over 6.32 lakh cases, with losses reaching ₹485 crore, indicating an ongoing battle against cybercriminals.
The Exponential Growth of UPI Transactions
The transformation of India's payment ecosystem has been nothing short of revolutionary, with UPI at its forefront. The Minister of State for Finance, Pankaj Chaudhary, highlighted in a parliamentary response that UPI transactions have witnessed an astronomical surge. From a modest 92 crore transactions in 2017-18, the volume is projected to reach an astounding 18,587 crore in 2024-25. This represents a compound annual growth rate (CAGR) of approximately 114%, underscoring the indispensable role of UPI in India's digital economy.
The Strategic Rationale Behind the Policy Change
The NPCI's decision to disable P2P collection requests is a proactive measure designed to safeguard the integrity of the UPI platform. By eliminating this specific vector for potential fraud, the NPCI aims to create a more secure environment for the 500 million-plus UPI users. While the exact implementation details are still unfolding, the directive for member banks and payment apps to cease processing P2P collection requests by the stipulated deadline is clear.
The Final Solution: A Secure Digital Future
The impending restriction on UPI P2P collection requests marks a pivotal moment in India's journey towards secure digital payments. While it may necessitate adjustments for some users and businesses, the overarching goal of mitigating fraud and enhancing user trust is paramount. This strategic pivot by NPCI is expected to foster a more resilient and secure digital financial ecosystem for all Indians, reinforcing the nation's position as a leader in digital payment innovation.
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