Online payment frauds surge over 400% in India, says RBI
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Digital payment frauds in India have experienced a staggering increase, surging over fivefold to 14.57 billion rupees ($175 million) in the fiscal year ending March 2024, as reported in the Reserve Bank of India's (RBI) latest annual report.
This alarming rise coincides with India's transformation into a digital payments powerhouse, primarily driven by the introduction of the Unified Payments Interface (UPI) in 2016. UPI has revolutionized money transfers, enabling instant transactions via mobile phones. According to RBI data, the value of UPI transactions has skyrocketed by 137% over the past two years, reaching 200 trillion rupees.
The proliferation of digital payments, bolstered by affordable internet access and increased financial inclusion, has unfortunately created a fertile ground for fraudsters. Nikhil Jois, head of growth at fraud detection platform Bureau, highlighted the vulnerabilities: "Coupled with a lack of financial literacy and imprudent use of technology, a vast population is rendered vulnerable to such attacks. Fraudsters are getting sophisticated by the day, while financial institutions and fintechs, jostling for market share and growth, have loosened controls."
In response to the rising threat, the central bank has launched several high-profile campaigns to educate consumers about financial fraud. Notably, advertisements featuring Bollywood star Amitabh Bachchan have been used to warn users about the risks associated with online money transfers.
The RBI report also indicated that digital payments, including card and internet transactions, constituted 10.4% of the total fraud amount in the latest fiscal year, a significant increase from 1.1% in fiscal 2023.