Tech News: National Payments Corporation of India has taken strong action against unethical use of virtual ID. Basically, several fintech firms have different business plans to authorize UPI ID, which is the virtual ID created in the case of UPI i.e. Unified Payments Interface transactions. Now NPCI has issued a stern warning to all fintech companies not to do unethical activities with such UPI IDs. If this happens, the fine and the approval of the fintech company may be cancelled, said the National Payments Corporation. NPCI has sent a stern warning to all organizations in this regard.
At the same time member banks and third party payment apps have received this message from NPCI. In this letter, the National Payments Corporation said, in most cases, some fintech firms are offering services where businesses can authorize users through their UPI ID. This act is against the policy of NPCI and Reserve Bank of India. NPCI has directed all fintech firms to desist from such unethical practices. It states that UPI APIs are primarily for UPI payments, for user verification to prevent fraud, and cannot be used for any other purpose. Such APIs may never be used privately for any other purpose.
Earlier, identity verification platforms, payment aggregators and other fintech companies were providing such services by leveraging UPI application processing software. These APIs will help traders integrate systems and maintain information flow. NPCI said such unethical practices may result in suspension of the entire UPI service by the company and fine.
By using the NPCI network for UPI payments, such platforms may know information like username, bank account status, mobile number, alternate UPI ID. Such information is useful for consumer-facing brands to prevent fraud and authorize consumers.
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