Representative image showing UPI logo
Credit: iStock Photo
As per the latest report from National Payments Corporation of India, Unified Payment Interface faciliated an average of 596 million transactions per day in April 2025 in India. However, with increased use of smartphones for transacting digital cash, there is a spike in online fraud.
Cyber criminals are coming with newer nefarious techniques to hoodwink users to invest money via phones on bogus ventures and vanish in thin air.
Now, to thwart such online fraud, Department of Telecommunication (DoT) has announced to share Financial Fraud Risk Indicator (FRI) data with banking institutions and UPI service providers.
FRI is a risk-based metric that classifies a mobile number to have been associated with any financial crimes. Each number will be categorised under three groups-- medium, high, or very high risk of financial fraud.
It can be noted that in India, threat actors bribe naive villagers to use their government approved IDs such as voter ID and Aadhaar cards, to get SIMs and create mule bank accounts. and, they usually operate them for a few days. Once they transfer the ill-gotten money to accounts, they flee after withdrawing money from nearest ATMs.
Due to the lack of co-ordination between cyber police and banks, there is low chance of ever tracking the suspects and bring them to justice.
However, with FRI data, financial institutions will get first-hand information of phone owners' and assess the risks before they give the nod for opening bank accounts or allowing digital transactions on their UPI app.
Already PhonePe has used FRI data to thwart online scams on its UPI app. If the number gets flagged in its database, the app displays an on-screen alert to the user to decline transactions linked to Very High FRI mobile numbers. For Medium FRI numbers, PhonePe is reportedly working on displaying a soft warning before allowing the transaction.
Google Pay and Paytm are also upgrading the UPI service and soon will offer protection to their app users in India.
"With UPI being the most preferred payment method across India, this intervention could save millions of citizens from falling prey to cyber fraud. The FRI allows for swift, targeted, and collaborative action against suspected frauds in both telecom and financial domains. DoT is committed to prevent misuse of telecom resources by implementing national level technology-driven solutions and collaborating with stakeholders, thus ensuring a secure and safe telecom ecosystem for all citizens," DoT said in the press note.
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