NPCI Issues New Guidelines: UPI Set to Disable or Inactive UPI ID

UPI ID

The new circular issued by the NPCI asks the members of UPI (i.e., Third Party Service Providers and banks) to deactivate all the inactive UPI IDs and UPI numbers for all the financial transactions. The active UPI IDs and UPI numbers are those which have been active/used for one year for payments.

The National Payments Corporation of India (NPCI) has asked payment apps such as Google Pay, Paytm, PhonePe etc. and banks to deactivate the UPI IDs and numbers that have not been active for more than one year. The NPCI circular has been issued to all the members of UPI on November 7, 2023. The decision has been taken to prevent the inadvertent transfer of money to unintended recipients in case customers change their mobile number without disassociating their old number from the banking system, NPCI stated. There exists a possibility that that old mobile number can be issued to a new issuer.

Deadline to Deactivate the UPI ID?

The deadline to deactivate the UPI IDs is December 31. Customers who have not been active for more than one year will not be able to receive funds on their UPI IDs from January, according to an NPCI circular.

As per the new guidelines, the following must be done by the Third Party App Provider (TPAP) and Payment Service Providers (PSP) and implement the same by December 31, 2023.

All TPAPs and PSP banks shall 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.

UPI IDs and UPI numbers of such customers shall be disabled for inward credit transactions. Further, PSPs shall deregister the same phone number from the UPI mapper as well.

Customers with inward credit block UPI IDs and phone numbers shall re-register in their UPI apps for UPI mapper linkage. Costumes can make payments, and non-financial transactions using UPI Pin as needed.

UPI apps shall perform Requester Validation (ReqValAd) before initiating ‘Pay-to-contact’ and ‘pay to mobile number’. UPI apps shall show the customer name which has been fetched before initiating the transaction and shall not display the name which has been stored at the apps end.

Also read: What is the transaction limit for RuPay credit cards on UPI?

The UPI, a revolutionary platform enabling swift and convenient fund transfers between bank accounts via smartphones, has witnessed a remarkable surge, with a billion transactions added within a mere two months, taking the total transactions to an unprecedented 11 billion. But this burgeoning user base has now prompted the NPCI to issue the following directives.

All banks, third party apps, such as PhonePay and Google Pay will deactivate and shut down inactive UPI IDs. NPCI has allotted time till December 31, 2023 for this. Thus, users must activate their UPI ID before this date to avoid cancellation of their dormant UPI IDs. Meanwhile, before deactivating the users UPI ID, the bank will give a notification to the users through email or message.

A new initiative has been taken to ensure a safe and secure transactional experience. As per the NPCI circular, “In the realm of digital payments, it is essential for customers to regularly review and verify their information within the banking system to ensure a safe and secure transactional experience. However, it has come to our attention that customers may change to a new mobile number without disassociating the previous number from the banking system.”

The decision has been made to avoid the unintentional transfer of funds to unintended recipients if customers change their mobile number without delinking their old number from the banking system.

NPCI, in the circular, stated, “All TPAPs and PSP (Payment Service Provider) banks shall identify UPI IDs and associated UPI numbers and phone numbers of customers who have not performed any financial (debit or credit) or non-financial transactions for a time period of 1 year from the UPI apps.”

NPCI’s Directives

NPCI said in its directive: “It has come to our attention that customers may change to a new mobile number without disassociating their previous number from the banking system. In accordance with the guidelines stipulated by the Telecom Regulatory Authority of India (TRAI), there exists the possibility of reallocation of the old mobile number to new user.”

NPCI’s directive requires all banks and third-party apps to embark on the deactivation of dormant UPI IDs. The focus rests on IDs that have remained inactive, and devoid of any transactions for a period extending to one year. These inactive accounts will have their ability to receive money (inward credit transactions) turned off. Additionally, the phone number linked to these accounts will be removed from the UPI system, the NPCI release said.

Accordingly, customers with inward credit block UPI IDs and phone numbers will need to re-register their accounts in the UPI apps. This step is to link their accounts back within the UPI system.

Once re-registered, users can make payments and non-financial transactions using their UPI PIN as usual.

Before initiating payments to contacts or mobile numbers, UPI apps shall perform Requester Validation (ReqValAd), the release added. This is being done to ensure that the name shown during a transaction is the accurate customer name, and will prevent any wrong fund transfer.