NPCI orders banks to stop UPI transactions from apps that are not complying with its directive

Circular sent by NPCI stated a deadline for all UPI apps to comply post which it has the “right to decline the transactions for such non-compliant apps.” The National Payments Corporation of India is cracking down on all the UPI apps that are not complying with its directive. NPCI has reportedly instructed all banks and payment service providers to reject UPI transaction requests of non-compliant apps. According to a report by Business Standard, as per the NPCI directive, all UPI apps must have the support for sending or receiving money through virtual payment address or VPAs, generate QR codes and accept payments by scanning and respond to intent calls on the same phone. The circular sent by the NPCI stated a 16 April deadline for all UPI apps to comply after which “NPCI reserves the rights to decline the transactions for such non-compliant apps.” Srikanth Lakshmanan, founder of Cashless Consumer, a public education initiative on banking and digital payments said in an interview with Business Standard “In the absence of public failure rates, poor grievance mechanism support across UPI apps, NPCI circular giving permission to PSPs to decline transaction as they deem fit on transactions initiating from non-compliant apps is dangerous.