The National Payments Corporation of India (NPCI) has recently issued a new directive aimed at banks, UPI payment apps (PSPs), and third-party UPI service providers concerning the usage of numeric UPI IDs. This initiative seeks to enhance interoperability, boost user convenience, and minimize errors related to changes in mobile numbers during UPI transactions. All UPI service providers are mandated to adhere to these fresh guidelines by March 31, 2025.

Key Highlights of the Directive

In a press release dated March 3, 2025, NPCI emphasized the necessity for banks and PSPs to utilize the Mobile Number Revocation List/Digital Intelligence Platform (MNRL/DIP) and to regularly update their databases, at least weekly. This proactive approach to managing recycled or churned mobile numbers aims to significantly reduce errors in transactions that arise from changes in user phone numbers.

Who Needs to Comply?

This directive is principally directed at banks, UPI payment apps, and third-party UPI service providers who are involved in handling UPI transactions.

What Changes from April 1, 2025?

Starting April 1, 2025, banks and UPI apps will be required to:

  • Regularly check and update their mobile number records to avoid errors stemming from recycled or changed mobile numbers.
  • Seek clear and explicit consent from users before assigning or updating their numeric UPI IDs. Users will be defaulted to an opt-out status, and must actively opt-in to utilize this feature. Notably, consent requests cannot occur during transactions to prevent confusion.

Additionally, if the NPCI system delays in verifying a Numeric UPI ID, UPI apps may temporarily address the issue internally; however, these occurrences must be reported to the NPCI on a monthly basis for better transparency.

Understanding Recycled or Churned Numbers

According to guidelines from the Department of Telecommunications (DoT), mobile numbers that are disconnected may be reallocated to new subscribers after a gap of 90 days. Typically, if a subscriber does not make any calls, send texts, or use data for three months, the number is deactivated by the telecom service provider. Subsequently, these operators reassign such mobile numbers to other subscribers, which are termed recycled or churned numbers.

With the new guidelines, UPI apps are now obligated to seek user consent regarding whether they wish to seed or port their UPI number. A UPI number serves as the bank-verified phone number that acts as an identifier for the UPI ID, allowing users to receive payments regardless of the app being used.

Previously, explicit consent was not required; however, moving forward, obtaining consent becomes essential. Routine updates from the PSP or bank will ensure the accurate mapping of UPI identities, preventing erroneous transaction routing while simultaneously improving user security.

Reporting Requirements

All UPI banks and applications must comply with these regulations by March 31, 2025. Effective from April 1, 2025, banks and UPI apps will also be obligated to share monthly reports with the NPCI concerning their management of Numeric UPI IDs.

Conclusion

These updates are designed to streamline UPI transactions by making them smoother, safer, and more user-friendly. By addressing errors commonly linked to mobile number changes and increasing transparency within UPI payments, the NPCI’s new guidelines herald a promising future for digital transactions in India.