In the year ending in March 2024, digital payment frauds in India climbed by more than five times, amounting to 14.57 billion rupees ($175 million).
The increase in fraud was noted in the Reserve Bank of India’s annual report.
Digital Payment Frauds on The Rise: RBI Annual Report
Since the Unified Payments Interface (UPI) was introduced in 2016, digital payments in India have increased dramatically. With UPI, consumers’ mobile phones can instantaneously transfer money.
Over the last two years, UPI transactions have increased in value by 137% to 200 trillion rupees.
Digital payments have become more popular in India due to expanded financial inclusion and improved internet connectivity. The increasing use of digital payments has made victims of fraud more numerous.
Head of growth at fraud detection platform Bureau Nikhil Jois emphasized the vulnerability brought about by careless use of technology and a lack of financial awareness, “Coupled with a lack of financial literacy and imprudent use of technology, vast population is rendered vulnerable to such attacks.”
In the struggle for market share and expansion, financial institutions and fintechs have relaxed regulations.
Programs Initiated by RBI For Public Awareness
To increase public awareness of financial fraud, the Reserve Bank of India has started a number of well-known programs. Bollywood actor Amitabh Bachchan has made appearances in commercials warning people about the dangers of sending money online.
In fiscal 2024, digital payments—which include card and online transactions—accounted for 10.4% of the total amount of fraud. This represents a noteworthy rise above the 1.1% recorded in the fiscal year 2023.
The surge in fraudulent digital payments aligns with India’s ascent to prominence in the digital payments domain. The spike in fraud-related events is indicative of how skilled the perpetrators are. The dearth of financial literacy has left a large populace open to attack.
Security safeguards have been weakened by the focus on expansion and market share placed by fintechs and financial institutions. The central bank runs campaigns to inform the public about the risks associated with financial fraud.
The RBI has been raising awareness of the risks associated with internet money transfers. The paper emphasizes the necessity of better security measures and more financial literacy within the digital payment ecosystem.
