Online Payment Frauds Jump Over 400 Percent in India, RBI Data Shows

According to the Reserve Bank of India's annual report released on Thursday, digital payments fraud in India saw a more than five-fold jump to 14.57 billion rupees ($175 million) in the year ending March 2024 compared to the previous period.

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

The growing popularity of digital payments creates a bigger target for fraudsters, said Nikhil Jois, head of growth at fraud detection platform Bureau. “Coupled with a lack of financial literacy and reckless use of technology, a large population becomes vulnerable to these attacks,” he said. “Fraudsters are becoming more sophisticated every day, while financial institutions and fintechs, fighting for market share and growth, have loosened controls.”

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

Digital payments, including card and internet transactions, accounted for 10.4% of the total fraud amount, compared to 1.1% in FY2023.

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