Online payment fraud has jumped over 400 percent in India, RBI data shows

Digital payment fraud in India saw a more than five-fold jump to 14.57 billion rupees ($175 million) in the year ended March 2024 from the previous period, according to the Reserve Bank of India’s annual report released on Thursday.

The jump comes as India has been transforming into a digital payments powerhouse since the launch of the Unified Payments Interface, or UPI, in 2016, which allows users to transfer money instantly using their mobile phones. RBI data shows that the value of transactions on UPI has jumped 137% in the last two years to 200 trillion rupees. Cheap internet access coupled with greater financial inclusion has also led to a rise in digital payments across the country.

The growing popularity of digital payments is creating a bigger target for fraudsters, said Nikhil Jois, head of growth at fraud detection platform Bureau. “Combined with lack of financial literacy and reckless use of technology, a vast population becomes vulnerable to such attacks,” he said. “Fraudsters are becoming more sophisticated by the day, while financial institutions and fintech companies, fighting for market share and growth, have loosened their grip.”

The central bank has launched several high-profile campaigns to make consumers aware of financial scams, including ads featuring Bollywood star Amitabh Bachchan warning users to be aware of the risks when transferring money online.

Digital payments including cards and online transactions accounted for 10.4% of total fraud, up from 1.1% in FY2023.

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