UPI app users are advised to check with their service providers to confirm compliance with the new guidelines, ensuring uninterrupted transactions flow.
Starting February 1, 2025, the National Payments Corporation of India (NPCI) will enforce a rule prohibiting the use of special characters in Unified Payments Interface (UPI) transaction IDs.
Transactions initiated through UPI apps that generate IDs using special characters will be declined by the central system. Although most of the local payment providers comply with the new rules, a few ecosystem participants still fail to use the uniform ‘alphanumeric’ IDs. Therefore, payment app users are advised to check whether the service would halt with their providers. If your preferred UPI app hasn’t updated its system to comply with this new standard, your transactions may fail starting February.
This move aims to standardise the transaction ID generation process across all payment platforms, ensuring consistency, boosting efficiency and reducing potential errors. Besides, the new directive promotes uniformity across the UPI ecosystem, facilitating smoother interoperability between different banks and payment platforms. It is especially important as the ecosystem is rapidly growing. In the first half of 2024, UPI transactions in India surged by 52% year-on-year, reaching 78.97 billion.
UPI payment system is swiftly expanding even across previously untapped regions and populations. Thus, a recent report has revealed that UPI is slowly but steadily emerging as the preferred method of financial transactions in rural and semi-urban India. Besides, the system sees growing adoption among older generations due to initiatives similar to the one by GenWise and Axis Bank, which aims to empower India’s elderly population with the speed and convenience of UPI digital payments in its app-based online club for senior citizens.
