India’s wildly popular payments system attracts scammers

Arun Kumar has been running his fruit barn on a hectic Mumbai city every day for the past seven years.

It’s not an easy way to make a life.

” Being a street vendor is a challenge. There’s the worry of being robbed or, as I am certainly a qualified contractor, the local brain can come and destroy my business anytime”, he says.

However, at least one aspect of his labor has improved over the past four decades.

Everything was in income before Covid, according to Covid. However, UPI is now used by people to pay. Within hours, the script is scanned, and the payment is made.

” No problems of handling dollars, giving transform to customers. It has made my life and business clean, “he says.

UPI, or to give it its full title the Unified Payments Interface, was launched in 2016 in a partnership between India’s central banks and the world’s banking sector.

It’s an app-based immediate payment program that eliminates the need to provide bank details or any other personal details and allows users to send and receive funds, pay bills, and authorize payments in one step. And, maybe most important, it’s free.

It has become so popular that India is now the biggest real-time payments market.

In May, UPI recorded 14 billion purchases, away from nine billion the year before.

However, swindlers have found it to be a lucrative source of income due to its popularity and ease of use.

” While online payments are easy, they do come with risks,” says Shashank Shekhar, chairman of the Delhi-based Future Crime Research Foundation.

According to Mr. Shekhar, scammers use a variety of methods to key people, including convincing them to promote their UPI pin number, which is required to authorize payments.

Some swindlers also eluded legitimate banks apps by creating false UPI apps that defraud users and then prying up login information or other important data.

According to Mr. Shekhar,” The pace at which modern transformation took place in the country means sadly, digital literacy and secure internet practice may never catch up.”

He claims that the use of the UPI structure was the cause of nearly half of all financial scams between January 2020 and June 2023.

More than 95, 000 cases of fraud involving UPI were reported in the government’s fiscal year ending April 2023, away from 77, 000 cases the previous month.

Shivkali was one for target. She had always wanted to own a bicycle, but they were beyond her resources.

But, earlier in the year the 22-year-old, who lives in Bihar position in northern India, spotted one for sale on Facebook that looked like a great deal.

” I grabbed the opportunity without thinking,” she says.

She spoke to the owner a few clicks later, who said he would take over the vehicle’s paperwork for$ 23.

That went easily, but Shivkali continued to send the landlord wealth, via instant payments. She eventually ended up paying$ 200, but the scooter ( also commonly called a Scooty in India ), was never delivered.

Shivkali realised she had been scammed.

I have some training and am aware of what is happening in the world, so I did not believe I may be cheated. But swindlers are wise. They possess a way to persuade the other person,” she says.

The government and the central banks are looking into ways to safeguard UPI people from con artists.

But at the time, if a sufferer wants compensation, they have to process their bank.

” The problem is deeply rooted,” says Dr Durgesh Pandey, an analyst in economic crime.

” Most of the burden lies with lenders and telecommunication companies. They are lax in making identity checks, that’s why the fraudster ca n’t be traced.

” But the difficulty for banks is that they must strike a balance between equality, business ease, and identity check enforcement, especially.” The underserved segment of society will continue to exist without banking services if they are too firm.

However, Dr. Pandey contends that the lender is not entirely responsible for the majority of fraud.

” It’s a complicated issue because the issue is with businesses, but in the majority of cases, the victim is giving his credentials. I believe that the sufferer and the lender may bear the loss.

Despite those issues, UPI is being promoted in remote areas where it can be challenging to access bank service.

Poonam Untwalfrom Rajasthan runs a guidance centre which helps people use the internet and digital banking.

” Most of us are not that educated, nor know the proper usage of phones. She says,” I teach them that banks are right at their fingertips instead of just a phone to talk to people.”

She thinks that UPI may aid in the growth of the neighborhood business.

” Many people like me run a small business from our house. Funds can now be received and sent using UPI. People who do n’t have smartphones come to my center to do business,” she says.

As well as making advances into remote locations, UPI is spreading elsewhere.

Shops in Bhutan, Mauritius, Nepal, Singapore, Sri Lanka and UAE does get UPI payment.

And this year, France becomes the first German nation to accept Mobile payments, starting with Eiffel Tower tickets.

Back in Mumbai, Mr Kumar is delighted that he no longer has to use income, but remains afraid.

If he ca n’t get a good internet connection then customers can, by accident or design, make off without paying.

” For a little supplier like me it]UPI] made receiving funds very simple. However, I’m often afraid of scams. In the reports, I frequently hear about the rise in UPI fraud. Maybe some methods are developed to prevent losses for a smaller vendor like myself.