UPI Transactions May Be Declined from February 1, 2025

UPI Transactions Declined? New NPCI Rule May be the Cause

From February 1, 2025, certain UPI transactions may not be processed if the payment application used does not comply with updated guidelines set by the National Payments Corporation of India (NPCI). The organization has mandated that transaction IDs must exclusively contain alphanumeric characters, prohibiting the use of special symbols.

Any UPI transaction initiated with an ID containing special characters will be declined by the central system. This directive aims to standardize transaction ID formats across the UPI ecosystem to enhance security and consistency.

UPI Transactions on Some Apps May Fail from Feb 1, 2025

The NPCI has instructed all UPI service providers to ensure their systems generate transaction IDs using only alphanumeric characters. If a payment application fails to comply with this requirement, transactions from that app will not be processed. The responsibility for adhering to this guideline lies with the respective payment service provider (PSP).

NPCI Enforces Stricter UPI Transaction ID Compliance

A circular issued on January 9, 2025, reiterates an earlier directive from March 28, 2024 (OC 193), which initially advised UPI service providers to adopt alphanumeric transaction IDs. While many participants have adjusted their systems accordingly, some non-compliant providers remain. To address this, NPCI has now enforced a stricter approach, stating that any transaction ID containing special characters will be automatically rejected from February 1, 2025.

Additional NPCI Directives on UPI Compliance: NPCI has also provided further clarifications on UPI technical compliance, particularly regarding transaction ID specifications.

NPCI’s Updated Technical Standards for UPI Transactions

These updated standards aim to ensure uniform transaction processing, reduce errors, and improve reliability across the UPI ecosystem.

1. Transaction ID Length Compliance

   
   

   As per UPI standards, transaction IDs (TXNID) must be exactly 35 characters long and use only alphanumeric characters. Currently, discrepancies exist in the length of transaction IDs, ranging between 4 and 35 characters, which is inconsistent with UPI specifications.

   
   

   To ensure uniformity, all participating entities must adopt the standardized 35-character transaction ID format. Any transaction with a non-compliant transaction ID length will be rejected by the central system.

2. Duplicate Transaction IDs

   
   

   While validation mechanisms exist to prevent duplicate transaction IDs, some instances still occur, causing operational challenges and customer dissatisfaction. In rare cases where multiple databases are involved, some duplicate transactions may be processed, leading to settlement issues. To resolve this, NPCI has mandated that liability for such duplicate transactions will fall on the originating PSP, and the defaulting entity will bear the financial impact.

   
   

   If a bank identifies successful transactions in its internal system that do not appear in the raw data file, the remitting bank must not reverse the funds. Instead, the beneficiary bank should hold the funds in the recipient’s account until NPCI provides further instructions.

What This Means for UPI Users and App Providers

For everyday UPI users, these changes may result in temporary transaction failures on non-compliant apps, especially after February 1, 2025. However, the intent behind NPCI’s updated standards is to improve transaction reliability, security, and consistency across the UPI ecosystem. App developers and payment service providers are expected to update their systems promptly to avoid disruptions. Users are advised to keep their UPI apps updated and switch to compliant platforms if transaction issues persist.

Conclusion | UPI Transactions Declined

With these updates, UPI service providers must ensure that their systems are compliant by February 1, 2025, to avoid transaction failures. Users are advised to verify whether their chosen UPI apps follow the updated guidelines to prevent payment disruptions. NPCI’s initiative aims to enhance the security and efficiency of digital transactions, ensuring seamless and standardized operations across all platforms.

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