NPCI stops UPI pay within same account, effective August 1

BENGALURU: National Payments Corporation of India (NPCI) has stopped UPI payments within the same account number to curb artificial inflation of transactions. NPCI manages the payment railroad.

NPCI said in a circular issued to banks that transactions where the payer and the payee account are actually the same will be blocked from August 1. ET has seen a copy of the circular.

“While analysing the transaction patterns we have observed instances wherein both credit and debit accounts are same…customers are sending money from their account to the same account…these transactions do not serve any use case and also add unnecessary load on the system,” read the circular.


NPCI said that all such transactions will be blocked in the UPI central system and has also asked payment service providers and banks to block such transactions at their end.

Explaining how these transactions have been happening, NPCI said that transactions are being done between same UPI accounts or in some case from the UPI ID to the account number, but the underlying account remains the same and thirdly by sending money to another UPI ID but connected to the same bank account.

Bankers ET spoke to said with multiple non-banking private entities jostling for a share in the UPI ecosystem, players were offering multiple cashbacks. This could encourage consumers to do multiple and unnecessary transactions to get cashbacks. The NPCI hopes to stop transactions which do not serve any known use case.

“This could reduce the growth of the number of transactions happening on UPI, but then it is better to have lesser but meaningful transactions than false transactions on the platform,” said a senior banker with a private sector bank.

Another top executive of a payments company which works on UPI said failure rates on UPI also tend to be high because of low-value, repeated transactions on the platform. Such fake transactions could be substantially reduced after NPCI’s circular.