Digital Services & Products

Online Payment Frauds Jump Over 400 Percent in India, RBI Data Shows

June 1, 2024

Digital payment frauds in India experienced a staggering increase, rising more than fivefold to 14.57 billion rupees ($175 million) in the year ending March 2024, according to the Reserve Bank of India’s annual report published Thursday.

This surge coincides with India’s transformation into a digital payments powerhouse, catalyzed by the 2016 launch of the Unified Payments Interface (UPI), which enables instant money transfers via mobile phones. RBI data indicates that the value of UPI transactions skyrocketed by 137% over the past two years, reaching 200 trillion rupees. The expansion of internet access and greater financial inclusion have also driven the rise in digital payments across the country.

Nikhil Jois, head of growth at fraud detection platform Bureau, commented on the situation, stating that the increasing popularity of digital payments has made them a larger target for fraudsters. “Combined with a lack of financial literacy and imprudent use of technology, a vast population is rendered vulnerable to such attacks,” he said. “Fraudsters are getting sophisticated by the day, while financial institutions and fintechs, competing for market share and growth, have loosened controls.”

In response to the surge in digital payment frauds, the Reserve Bank of India has launched several high-profile campaigns aimed at raising consumer awareness about financial fraud. These efforts include advertisements featuring Bollywood star Amitabh Bachchan, who cautions users about the risks associated with online money transfers.

Digital payments, encompassing cards and internet transactions, now account for 10.4% of the total fraud amount, a significant increase from 1.1% in the fiscal year 2023.

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