Out of all the reported digital payment frauds in India, over half (55 per cent) were United Payments Interface (UPI)-related, a new report released on Tuesday revealed. Another 18 per cent are card related, 12 per cent are related to internet banking and nine per cent are from phishing calls.
Most of the UPI-related frauds, however, have a low ticket size. According to "The Anatomy of Fraud 2023" report by digital solutions platform Bureau and consultancy firm Praxis, 50 per cent of these have an average ticket size of less than Rs 10,000. Another 48 per cent have a ticket size between 10,000 and 1,00,000. Only two per cent of these frauds have a ticket size of Rs 1,00,000.
The findings of the report are crucial given the fact that UPI has gained unprecedented popularity and adoption in the past few years. In 2019-20 (FY20), UPI accounted for 36 per cent of all the non-cash retail transactions in India, based on volumes. In FY21, it rose to 44 per cent. In FY22, 57 per cent of all non-cash retail transactions were made via UPI.
Moreover, internet penetration in India is expected to jump from 879 million users in 2022 to 1.14 billion in 2027. The number of digital payments is expected to grow 74 per cent from 2022 to 2027, the report added.
"Fraudsters go where the money and opportunity are. The rising digitisation, digital inclusion expansion, and the growing number of digital-first businesses suggest India is going to continue to be a hotbed of digital fraud," said Ranjan Reddy, chief executive officer (CEO) of the Bureau.
Among all the frauds, identity-related frauds held the highest share in most industries. 65 per cent of all frauds in financial services were account-related in 2021. These include account takeover and account creation. 54 per cent of frauds in the e-commerce industry were account-related.
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The report added that the Centre is being proactive in preventing these frauds. Its initiatives like stringent know-your-customer (KYC) norms and regulations for real-money gaming sectors, among others, are providing protection to the customers.
Moreover, 60 per cent of the organisations surveyed stated that they will increase their spending on fraud detection and prevention in the next two years.