In a move to curb digital payment fraud, financial institutions in India are considering implementing a rapid alert system for transactions exceeding Rs 5,000. This measure would primarily target transactions involving new users or vendors, according to sources in the Ministry of Finance.
The proposed alert system would involve sending a verification message or making a confirmation call to the user before authorizing a high-value transaction. This practice is already employed by many institutions for certain debit and credit transactions.
This proposal deviates from an earlier suggestion to introduce a mandatory four-hour delay for first-time transactions between UPI users. The four-hour delay idea was met with resistance due to concerns about its potential to hinder the growth of India’s digital payment ecosystem.
The government is also exploring alternative strategies to combat digital payment fraud, such as implementing an international mobile equipment identity (IMEI)-based suspicious caller list to warn users about potential spam calls. Discussions with the Telecom Regulatory Authority of India (TRAI) are ongoing to finalize these measures.
The implementation of an alert system for large digital transactions is expected to strike a balance between enhancing security and preventing disruptions to India’s burgeoning digital payment landscape.
