UPI transactions on some apps to stop working from February 1, 2025?
NPCI has made the point clear to UPI operators that they should start using alphanumeric characters for UPI transaction IDs or the central system will not allow any UPI transactions from that app. The responsibility of complying with this directive is on the payment app.
According to an UPI circular dated January 9, 2025, “Reference may be taken from our OC 193 dated 28th March 2024 wherein UPI ecosystem players were advised to use only alphanumeric characters for generating UPI transaction ID. This is to ensure compliance with UPI technical specifications. We have been working with the ecosystem to improve compliance, though the issue has been largely resolved, it is observed that a few of the participants continue to be non-compliant. Considering the criticality of compliance to the specifications, it has been decided not to allow any special characters in UPI transaction ID. Any transaction with ID containing special characters shall be declined by the central system. This shall be effective 1st February 2025.”
UPI apps which are non-compliant with this NPCI’s direction won’t be allowed to trasact, multiple experts have said to ET Wealth Online.
Mohan K, Founder of TechFini, says, “UPI transactions containing special characters in their transaction IDs will be declined by the central system. Only transaction IDs that follow an alphanumeric format will be processed successfully. This move aims to enhance system efficiency, prevent potential security vulnerabilities, and ensure uniformity across UPI transactions.”Alok Singh, Executive VP – Digital Business at Ongo (digital payments platform of AGS Transact), says, “Most of the major payment ecosystem players have complied with this NPCI direction about using 35 digits alphanumeric characters for UPI transaction IDs. However, there are some PSPs who are still non-complaint with this direction. So if a consumer is using any of the PSPs who are still non-compliant with this NPCI direction post February 1, 2025 then they will not be able to transact using UPI through that PSP.”Rahul Jain – CFO, NTT DATA Payment Services India, agrees with Singh and says, “This significant move aims to bring uniformity in UPI day-to-day operations and further augment technical standardization. National Payments Corporation of India (NPCI) has given an adequate amount of time to the industry players to make the transition and adhere to UPI technical criteria. Failing to do so, transactions with special characters will be declined by the central system. Given the state of preparedness, most of the industry players have already adhere to full compliance by the given deadline to avoid any disruptions. For those who have not yet followed the rules will ensure to implement soon.”
NPCI issued these other directions about UPI also
According to an NPCI circular dated March 28, 2024, here are the other directions:
Compliance to UPI technical specifications- TRANS ID
Issue number 1: Length of transaction ID
- As per UPI technical specification transaction ID (TXNID) length must be 35 digits alpha numeric. On analyzing the data, the following anomalies are observed:
- Length of the transaction IDs: PSPs are not using consistent length of transaction IDs (current transaction IDs (TXNID) are ranging from 4 digits to 35 digits) which is inconsistent with the technical specifications of UPI.
- Duplicate transaction IDs: Duplicate transaction IDs are used by PSPs while originating the transactions.
NPCI’s direction: Length of transaction IDs:
- In order to bring in standardisation, it is mandated that the participating entities should use the transaction ID with a length of 35 characters (alphanumeric) only.
- Validation of field length should be implemented in the central system, any transaction with transaction ID not in compliance with the specification shall be rejected by the system with appropriate reason.
Issue number 2
2. Duplicate transaction IDs
Validation is already in place, duplicate records are already validated and rejected. Such rejections due to duplicate TXNID are causing immense customer dissatisfaction. Further, in some exceptional cases where in the central system multiple DBs are involved, a few transactions with duplicate IDs are getting processed in the online system. However, the same is getting rejected in the back office leading to settlement issues.
NPCI direction:
In the event of such duplicate transactions getting processed by the central system leading to settlement issues, it may be noted that the liability will be shifted (defaulting PSP shall be debited) to such originating entity as duplicate transaction ID is not in compliance with the technical specifications.
Additionally in a scenario wherein the banks have successful transactions in their switch/internal system, however such transaction/s are not present in the raw file provided then:
- Remitting banks should not reverse the funds to the customer’s account
- Beneficiary banks should hold funds in the beneficiary account.
- Such cases should be reported to NPCI immediately for further course of action.
“The benefit of mandating usage of 35 digits alphanumeric transaction ID is that, a standardised format helps in tracing unique transactions. In the current situation there are too many UPI apps and each follows their own systems for generating transaction IDs which makes it tough to trace the transactions. You see when a customer used to complaint and quoted the transaction ID they were unable to easily trace it and required information from various sources to get to the source and destination of the transaction. Hence, it is now proposed to make the transaction ID mandatorily standardised. This 35 digit transaction ID can help identify things like PSP, remitter of the money, date of transaction and so on,” says Singh from Ongo (digital payments platform of AGS Transact).
Mohan from TechFini believes that by eliminating special characters, UPI can streamline processing, reduce errors, and improve interoperability among banks and payment service providers. “Merchants, payment gateways, and financial institutions must ensure that all transaction IDs generated or processed within their systems conform to the alphanumeric requirement to prevent payment failures,” he says.
