NPCI Introduces Stricter Rules for UPI Transactions to Prevent Payment Errors

The National Payments Corporation of India (NPCI) has announced a crucial update to enhance the safety of UPI transactions. To curb misdirected payments, NPCI has mandated that all UPI applications must display the beneficiary’s official bank-registered name during the pre-transaction confirmation stage.

This means the name you see before confirming any payment will be sourced directly from the banking system via the Validate Address API, ensuring it is accurate and official. UPI apps will no longer allow the display of beneficiary names pulled from QR codes or those manually entered by users. Furthermore, users will be unable to edit or change the beneficiary’s name within the app.

Instead of relying on saved contact names, users will now see the exact name as registered with the recipient’s bank account. This critical change aims to reduce confusion and prevent accidental payments to the wrong person.

The new guidelines will come into effect from June 30, 2025, and will apply to both Peer-to-Peer (P2P) and Peer-to-Peer Merchant (P2PM) transactions. Popular UPI platforms such as Google Pay, PhonePe, Paytm, and BHIM are expected to incorporate this update promptly.

This initiative by NPCI will provide UPI users with greater confidence and clarity, ensuring their money reaches the intended recipient and significantly improving the security of digital payments across India.