Since its inception & revolution in 2016, UPI—India's real-time digital payments system—has become part and parcel of daily life. Most of us are so seduced by its utility and simplicity that we don't realise just how much we use it. In December 2021, some $111 billion surged through UPI's pipes over the course of around 4.5 billion transactions. UPI's success hasn't gone unnoticed. Many other countries see it as a potential blueprint for their own digital payments ambitions. In the US, Google even pointed to UPI as a model that the Federal Reserve—the country's banking regulator—should look to replicate. The sheen of UPI, however, masks an underlying problem—fraud. Scamsters have weaponized UPI's various payment flows to con gullible Indians out of over $25 million each month. And according to many in the industry, around four out of every five frauds perpetrated via UPI go unreported. It's a thorny problem and one that payments companies, banks, and law enforcement officials are all scrambling to solve. The UPI fraud racket, however, is like a game of whack-a-mole. Every time systems are built to protect against a particular scam, another pops up. Every time a phone number or bank account is identified as dubious, scammers quickly move on to another. Where does the buck stop with these frauds, and can they ever be stamped out of an otherwise stellar system? Therefore, our team shines a light on an issue that isn't discussed nearly enough in the context of arguably India's greatest payments innovation.
