RBI proposes new safeguards to curb surging digital payment fraud

Complaints related to fraud have impeded the potential of digital payments in India, the Reserve Bank of India said on Thursday. In a new discussion paper, the central bank proposed several measures to curb fraudulent activity while granting customers greater control over their transactions.

The discussion paper, titled ‘Exploring safeguards in digital payments to curb frauds’ proposed four solutions:

• lagged credit for push payments other than low-value transactions;
• additional authentication for high-value transactions by vulnerable sections of society;
• large credits to be received only by accounts with satisfactory additional review; and
• customer-induced controls.

The discussion paper is open for public comments and feedback until 8 May, the RBI said.

“A typical fraud through digital payments may not involve technical compromise of systems, but mostly through manipulation of users through social engineering, coercion, or impersonation. Victims, acting under deception, themselves initiate and authenticate transactions, leading to ‘authorised’ push-payment (APP) frauds,” RBI said in the paper.

“Fraudsters are deploying various tactics, such as bogus call centres, deepfake-driven impersonation scams and mule account networks. Almost all sections of society, especially vulnerable groups such as senior citizens have fallen prey to such APP frauds,” the RBI said, adding that this dictated an “urgent need” to put in place systems and processes to address these issues.

APP fraud exploits seamless payment environments, where the ability to transfer funds instantaneously often results in victims completing transactions before realising they are being duped. “Post-transaction remedies to recover such funds being limited, a defrauded user is often left with a few remedies and uncertain outcomes, which are time-consuming and show low recovery rates,” the RBI said.

Digital fraud on the rise

Data from the National Cyber Crime Reporting Portal (NCRP) shows that digital-payment fraud has surged over the past four years. About 2.8 million cases totalling ₹22,931 crore were reported in 2025, compared to 260,000 cases worth ₹551 crore in 2021.

The solutions proposed in the paper aim to induce a lag in certain categories of digital payments by way of process-level changes or introducing additional due diligence requirements, thereby buying time for both customers and payment system operators (PSOs) to halt fraudulent transactions. These won’t just delay or stop transactions from being executed, but also prevent the proceeds from being moved away quickly, in addition to empowering customers through customised controls, the central bank said.

Digital payments comprise credit and debit cards, the Unified Payments Interface (UPI), Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), mobile wallets, and net banking.