The new NPCI rules are aimed at curbing instances of misdirected transactions where people generally transfer money to the wrong account due to confusion with beneficiary names.
The National Payments Corporation of India (NPCI) has taken a significant step to address the issue of misdirected payments. They have introduced a new feature aimed at safeguarding your hard-earned money. Under the new guideline, all UPI apps need to make sure that only the name of the person who will receive the money appears on the pre-transaction details page. This name should come directly from a trusted source (banking name as fetched from Validate Address API). The app should not show any other names, like those from QR codes or names that the payer might enter for the payee. It’s important for users to see only the official name to avoid confusion.
In addition to this, UPI apps will turn off any options that let users change the name of the person they are sending money to within the app.
In simple terms, instead of relying on the name saved in your contact list, you’ll see the actual name of the recipient as it appears in their bank records. This feature ensures that before you hit the confirm button, you can verify that the money is going to the correct person.
The implementation of this new rule is slated for June 30, 2025. It will apply to both Peer-to-Peer (P2P) and Peer-to-Peer Merchant (P2PM) transactions.
The primary goal is to provide UPI users with accurate information about account holders, enhancing the security of their funds and eliminating any potential confusion. If you mistakenly select the wrong contact during an online payment, you’ll be alerted before the transaction is processed.
This initiative will greatly benefit users of popular platforms like Google Pay, PhonePe, Paytm, and BHIM across the nation. All these platforms are expected to integrate this update into their systems promptly.
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