1 in 5 families surveyed that have someone using UPI confirm experiencing UPI fraud once or more in the last 3 years; 51% of them did not file any complaint, anywhere

June 26, 2025, New Delhi: The digital payments transactions including transactions through Unified Payment Interface (UPI) have increased consistently during the last five financial years. However, digital payment frauds too have increased rapidly.

The Reserve Bank of India's (RBI) Annual Report for FY2024–25 indicates a significant rise in digital payment frauds, which encompass UPI transactions. While the report doesn't provide a specific breakdown for UPI frauds, it states that digital payment frauds numbering 13,516, accounted for 56.5% of all reported banking frauds. Totalling INR 520 crore, most of the digital frauds were through card and internet-based transactions, which includes UPI.

Rapid rise in use of UPI is seen to be providing more opportunities for fraudsters. In FY2024–25, UPI witnessed 185.8 billion transactions, a 41.7% increase from the previous year. In terms of market share, UPI accounted for 83.4% of the total digital payment volume. The RBI's report highlights the need for continued vigilance, robust security measures, and public awareness to safeguard users against digital payment frauds.

The RBI has implemented a Central Payment Fraud Information Registry (CPFIR), a system to track and report payment frauds using AI and machine learning models. The security tools include device binding, PIN-based two-factor authentication and daily transaction limits.

For consumer security, the National Payments Corporation of India (NPCI) has set the daily limit for UPI transactions at INR 1 lakh. However, the limit can vary depending on the bank, app, and type of transaction. For instance, the limit is INR 2 lakh for Capital markets, insurance, collections, and foreign inward remittances. The limit is INR 5 lakh for tax payments, payments to educational institutions and hospitals, payments to IPO, RBI retail direct schemes payment. UPI Lite and UPI 123Pay options cater to different needs. Users are also restricted to a maximum of 20 UPI transactions in a single day.

The government has also launched the National Cybercrime Reporting Portal (cybercrime.gov.in) and helpline 1930 for users to flag suspicious activities. Efforts are also being made to educate and create awareness among the public about cybercrimes.

To provide network-level intelligence and facilitate real-time data sharing across the digital payments’ ecosystem, the central bank is establishing a Digital Payments Intelligence Platform. This platform will leverage advanced technologies like AI and machine learning to identify and mitigate fraud risks. A committee led by A.P. Hota, former MD and CEO of NPCI, has been formed to examine various aspects of setting up this infrastructure.

In December 2024, the RBI introduced MuleHunter.AI, an AI-ML-based fraud prevention tool developed by the Reserve Bank Innovation Hub (RBIH). This tool assists banks in identifying mule accounts used for illegal activities. It has been piloted in two public sector banks with encouraging results. To combat phishing and enhance trust in digital banking, the RBI is introducing exclusive internet domains: .bank.in for banks and .fin.in for non-bank financial entities.

With over a thousand posts and comments coming on the subject consistently each month for the last 12 months, LocalCircles through a survey has strived to find out from people using digital payments if they or their family members have experienced UPI fraud and if so, what kind of fraud. The survey received over 32,000 responses from UPI users located in 365 districts of India. 67% respondents were men while 33% respondents were women. 42% respondents were from tier 1, 27% from tier 2 and 31% respondents were from tier 3 and 4 districts.

1 in 5 families surveyed have someone using UPI confirm experiencing UPI fraud once or more in the last 3 years

The survey first asked people using UPI for digital payments, “Did you or your family members experience UPI frauds in the last 3 years?" Out of 16,312 who responded to the question 20% stated “yes” they or their family members have experienced fraud on UPI in the last 3 years while 78% of respondents stated “no” and 2% of respondents did not give a clear answer. To sum up, 1 in 5 families surveyed have someone using UPI confirm experiencing UPI fraud once or more in the last 3 years.

Of those UPI users who experienced fraud, 40% surveyed confirm inadvertently clicking on a payment link to accept funds and instead had their account debited; 50% say someone hacked their UPI pin and conducted transactions

The survey next asked UPI users who experienced frauds, “What are all the different types of UPI frauds you or your family members have experienced in the last 3 years?" Some among the 4,894 who responded to the question indicated more than one option. 50% indicated “someone hacked our UPI settings/ PIN and conducted transactions”; 40% stated “clicked on a UPI payment link from someone which debited our account instead of crediting it”; 20% also stated “clicked on a QR code from someone which debited our account instead of crediting it"; 20% stated "revealed my OTP or UPI pin to someone who posed as a bank representative/ official and our account was debited”; 50% stated “UPI fraud happened in ways other than the ones listed above” and 10% of respondents did not give a clear answer. To sum up, among those UPI users who experienced fraud, 40% surveyed confirm inadvertently clicking on a payment link to accept funds and instead had their account debited; 50% say someone hacked their UPI pin and conducted transactions. Many of the users experienced fraud in multiple ways.

Over 1 in 2 of those users who experienced a UPI fraud in the last 3 years did not file any complaint

For varied reasons consumers don’t complain about products and services that violate their rights. In the case of financial frauds people do try to seek some redressal by filing complaints with the police, on government portals, the court, etc. The survey next asked, “When you or your family members experienced UPI fraud in the last 3 years, who all did you file a complaint with?” Some among the 15,862 who responded to the question indicated more than one option. 38% of respondents indicated that they filed a complaint on the “cyber crime portal”; 25% stated “UPI platform that I use”; 13% stated “bank that I use”; 13% stated "NPCI”; and 13% stated "RBI”. However, 51% of respondents stated that they “did not file any official complaint”. In essence, over 1 in 2 of those users who experienced a UPI fraud in the last 3 years did not file any complaint.

In summary, UPI fraud is becoming a serious issue as 1 in 5 families surveyed who have someone using UPI confirm experiencing fraud once or more in the last 3 years. Of those UPI users who experienced fraud, 40% surveyed confirm inadvertently clicking on a payment link to accept funds and instead had their account debited while 50% say someone hacked their UPI pin and conducted transactions. Despite there being many options to file a complaint, 51% of those who experienced a UPI fraud in the last 3 years did not file any complaint which means the official financial fraud numbers are grossly understated. The Government, RBI, NPCI, the banks and the platforms must enable a system where reporting UPI fraud is one click away with time bound response and action. In addition, all telecom and OTT service providers must be mandated to identify likely UPI fraud scenarios with links shared over SMS, Whatsapp, etc. with the use of artificial intelligence and flag risk to the users.

LocalCircles will escalate the findings of this study with the relevant stakeholders requesting intervention and action.

Survey Demographics

The survey received over 32,000 responses from UPI users located in 365 districts of India. 67% respondents were men while 33% respondents were women. 42% respondents were from tier 1, 27% from tier 2 and 31% respondents were from tier 3 and 4 districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey. The survey was conducted between March and June 2025.