Cyber Fraud In Digital Payments: A Global Study On UPI Scams And Online Financial Crimes
- IJLLR Journal
- 8 minutes ago
- 2 min read
Sristy Agrawal, Christ (Deemed to be University), Delhi NCR
ABSTRACT
The convergence of constant availability, low cost of transactions, and designed user interfaces via the real-time and instant payment systems has moved to the limelight of the retail finance to drive mass adoption and inclusion of the financial system. In Brazil, it is the case with Pix and in India, with Unified Payments Interface (UPI), both boasting hundreds of millions of users and having hundreds of millions of transactions within their country, respectively. But, it is the same design features of speed, ubiquity, near irreversibility and low friction pre-transactions that also have also offered fertile grounds to socially engineered and approved push payment (APP)-type fraud that in certain jurisdictions is already surpassing the legacy card fraud.
In this paper, the scams associated with the UPI and other internet financial frauds are discussed through the lens of digital-payment life-cycle and the weaknesses of onboarding, authentication, user interface design, ecosystem governance, and institutional response are identified. It adopts a doctrinal and comparative methodology, which is the reading of statutory and regulatory texts, central-bank circulars, payments-systems books, ombudsman cases, and new case law on UPI fraud in India and the fraud- governance regimes of Pix in Brazil and the Faster Payments system in the new mandatory APP reimbursement regime of the UK.
It is based on the argument that in modern fast-payment fraud, scam-based elements are the primary elements, and are founded upon social engineering, confusion of the UI, mule-account networks, and the inefficiency of redress systems, rather than on any actual technical compromise, and that the current liability systems and redress systems have not yet accommodated an authored- but-induced-transfer paradigm in which card fraud difficulties best suits. The paper proposes a four-pillar regime of rebalancing consumer protection and intermediary responsibility without prioritizing on inclusion or innovation, the four pillars of prevent, detect, respond and recover based on the experiences of other similar countries such as the Special Return Mechanism (MED) of Pix and mandatory reimbursement scheme of the UK Payment Systems Regulator. It introduces a systematic typology of UPI frauds, a systematic map of instant- payment fraud protection, and a roadmap of reform to be implemented in UPI- style ecosystems, but customized to other jurisdictions.
Keywords: UPI; fast payments; authorized push payment (APP) fraud; social engineering; mule accounts; cybercrime; consumer protection; dispute resolution.
