NPCI expands AI use to enhance customer safety in digital transactions

CHENNAI: The National Payments Corporation of India (NPCI) is leveraging Artificial Intelligence in a "big way" to enhance customer security in digital transactions, amid a surge in UPI usage.

NPCI is conducting a pilot study in collaboration with public and private sector banks to integrate Artificial Intelligence (AI) and Machine Learning for strengthening customer safety, NPCI Chief Risk Officer Viswanath Krishnamurthy said here.

Established in 2008 by the Reserve Bank of India and Indian Banks Association, NPCI oversees retail payment systems in the country.

Providing some statistics, Krishnamurthy noted that in March alone Unified Payments Interface (UPI) transactions reached 18.30 billion, marking a 36 per cent year-on-year growth. The transaction value stood at around Rs 24 lakh crore, reflecting a 25 per cent increase in growth year-on-year.

Over the past five years, UPI adoption has soared with a compound annual growth rate of 74 per cent, making it the largest retail payment system. Since its inception, UPI has onboarded over 460 million unique users, facilitating digital transactions across various segments.

With UPI-related payments gaining traction even in smaller cities, he said budget allocations for spreading awareness about such payments has been increasing every year.

"We are embarking on more and more awareness on UPI. Therefore a higher budget has been allocated," he told reporters.

The NPCI has also launched a multilingual television commercial featuring Bollywood actor Pankaj Tripathi, its brand ambassador, to spread awareness about UPI-related transactions.

Highlighting the growing threat of fraudulent transactions, he said nearly 100 per cent of transactions are done by customers themselves either out of 'greed or fear or ignorance.'

"About 85 per cent of the customers are greedy and fall prey to such scams. While 10 per cent of them out of fear and the remaining 5 per cent are ignorant. There is no new UPI customer who has fallen into pray for such scams. An individual who has made 10 UPI payments, falls prey to the 11th payment by clicking some links sent to their mobile handsets."

Even senior executives of corporations, including CFOs or heads of technology departments have been duped, Krishnamurthy noted.

To counter this, he said, "... we have been conducting a pilot study by engaging with public and private sector banks in the last one year..."

Additionally, NPCI is developing a mechanism to send a warning message to customers before they transfer money to a particular account that has been 'flagged' as a scam by other users.

By staying vigilant and informed, users can safeguard their money while enjoying the convenience of digital payments. UPI remains committed to ensuring a secure and seamless digital payment experience for everyone across the country, he added.

To a query, the official said NPCI International was available in seven countries while some nations were also keen on introducing similar UPI payments in their respective countries.