UPI Policy: Name to Appear Before Payment as Security Measure
The Modi government is enhancing UPI by requiring the display of bank account holder's name before sending money, reducing errors and increasing security.
Highlights
- •UPI users will now see the full name of the recipient's bank account
- •Enhances security in digital payments to avoid misdirected funds
- •Impacts businesses with names different from their official registered accounts
- •Simplifies transaction verification for customers
Starting June 1st, a major change is coming to the United Payments Interface (UPI). A significant enhancement in digital payment security has been announced. Whenever you use UPI to make a transaction, the actual name of the bank account holder will now appear before sending money. This rule is likely to reduce confusion and potential errors, making payments even more secure.
Enhancing Security with UPI
This policy change aims to combat instances where individuals might accidentally send funds to the wrong person due to unidentifiable QR codes or business names. Previously, many users encountered issues when the intended recipient's name was not visible during transactions, leading to potential misdirected payments.
The Modi government took this step as part of an effort to improve the overall digital payment ecosystem. By displaying the full bank account holder's name on the screen before a transaction occurs, customers can easily verify that they are sending money to the correct party. Given the widespread use of digital wallets like Google Pay, PhonePe, and Paytm, many everyday transactions will be affected.
Impact on Business Owners and Shopkeepers
This new regulation might impact business owners and shopkeepers who operate their payment systems under different names than those registered with their bank accounts. For instance, a small store's name or logo might not always reflect the actual account holder's identity. The Modi government advises these entities to ensure their official business names align with their registered bank details.
Understanding Why People Use UPI
The ease and convenience of using UPI have made it a go-to payment method for individuals across diverse transactions. From small grocery purchases to high-value retail transactions like buying jewellery, people now use UPI extensively. With the ability to send large sums quickly without any physical card or OTP (one-time password) requirement, UPI has grown in popularity significantly.
How It Affects Everyday Transactions
In the past, reliance on cash was common for many day-to-day transactions. Now, with a push towards digitalization post-demonetization, over 90% of Indians trust UPI-based transactions. The new rule will make it easier for consumers to verify recipients in real-time during payment processes.
