Online Payment Frauds in India Surge by Over 400 Percent, According to RBI Data

RBI data reveals that the value of UPI transactions has surged by 137% over the past two years, reaching 200 trillion rupees.

Digital payment frauds in India have surged 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 on Thursday.

This increase coincides with India’s rise as a digital payments leader since the introduction of the Unified Payments Interface (UPI) in 2016, which allows users to transfer money instantly via their mobile phones. RBI data shows that the value of UPI transactions has jumped 137% over the past two years, reaching 200 trillion rupees. The widespread availability of affordable internet and greater financial inclusion have also fueled the rise in digital payments across the country.

However, the growing popularity of digital payments has made them a prime target for fraudsters, said Nikhil Jois, head of growth at the fraud detection platform Bureau. “A lack of financial literacy and imprudent use of technology render a vast population vulnerable to such attacks,” he noted. “As fraudsters become more sophisticated, financial institutions and fintech companies, competing for market share and growth, have relaxed their controls.”

The central bank has initiated several high-profile campaigns to raise consumer awareness about financial frauds, including advertisements featuring Bollywood star Amitabh Bachchan, who warns users about the risks of online money transfers.

Digital payments, including card and internet transactions, accounted for 10.4% of the total fraud amount, up from 1.1% in fiscal 2023.