Highlights:
• RBI considering new “frictions” in digital payments to curb fraud
• One-hour delay for transactions above ₹10,000 under discussion
• Digital payment frauds rise 41 times in five years to nearly ₹23,000 crore
• RBI exploring universal “kill switch” for bank accounts
• Measures aimed at improving customer protection and fund recovery
• Transactions above ₹10,000 account for 98.5% of fraud value
• RBI plans to expand cross-border UPI connectivity globally
• Focus on stronger user controls and safer digital payments
Mumbai, May 29, 2026: The Reserve Bank of India (RBI) is considering introducing additional “frictions” in digital payment systems to tackle the rising number of online fraud cases involving authorised transactions initiated by customers themselves.
In its Annual Report for 2025-26, the RBI said it is exploring measures that could slow down certain digital payment transactions despite existing safeguards such as two-factor authentication, payee verification, and tokenisation.
“To address the continuing challenge of authorised push payment frauds — where customers themselves initiate payments despite the various safeguards already in place — introduction of certain frictions in digital payment processes would be explored,” the RBI said.
The central bank stated that the proposed measures are aimed at improving customer protection and enabling more effective recovery of funds in fraud cases.
The move signals a possible shift in India’s digital payments ecosystem, which has so far prioritised instant and seamless transactions through platforms such as Unified Payments Interface.
According to the RBI, authorised push payment frauds have become a major global concern as fraudsters increasingly use social engineering techniques to convince users to voluntarily transfer money.
Although the RBI did not specify the exact nature of the proposed “frictions,” a discussion paper released earlier this year suggested measures such as a one-hour delay for digital transactions above ₹10,000 before funds are credited to beneficiaries.
The paper also proposed additional verification mechanisms involving “trusted individuals” for vulnerable users, tighter monitoring of suspicious accounts receiving large transactions, and expanded customer-controlled security features.
RBI data showed that transactions above ₹10,000 account for nearly 45 per cent of fraud cases by volume and 98.5 per cent by value. The value of digital payment frauds has increased 41 times over the past five years, reaching nearly ₹23,000 crore.
The central bank is also exploring the introduction of a universal “kill switch” feature that would allow users to instantly block all debits from their accounts across digital payment modes.
Currently, customers can enable or disable domestic and international card transactions individually. RBI said broader security controls and the proposed kill switch facility would strengthen consumer confidence and help reduce fraud risks.
Separately, the RBI reaffirmed its plans to expand cross-border connectivity for Unified Payments Interface by linking India’s payment infrastructure with fast payment systems in other countries to enable secure and cost-effective international remittances and merchant payments.
