The menace of digital payment frauds—which grew over 40 times over four years to ₹23,000 crore in 2025—has forced the banking regulator to propose drastic steps. The RBI’s draft measures, which are open for public consultation till May 8, hinge on four core ideas—delayed high-value transactions, additional authentication for vulnerable sections, better customer control and more due diligence for large credits.
Among the proposals is a mandatory delay of up to an hour for digital transactions above ₹10,000. The idea is to create a cooling-off window during which a transaction can still be cancelled. Another proposal is to cap annual credits at ₹25 lakh for accounts that have not undergone enhanced due diligence. Other suggestions include enabling users to switch off payment mode, set transaction limits and activate a ‘kill switch’ to instantly disable all digital transactions in case of suspected fraud. To shield vulnerable customers such as senior citizens and the differently-abled, the RBI has floated the idea of requiring additional approval for transactions above ₹50,000 from a nominated ‘trusted individual’.
These measures would sacrifice speed for a system that thrives on the ease and instantaneousness of transactions. In principle, measures to enhance safety are much needed. But they come with the risk of disrupting India’s high-speed payment ecosystem that has earned global admiration. By the regulator’s own admission, introducing a lag for certain transactions may be in “conflict with the core design principle of immediacy of digital payments”. However, given the scale of digital arrest cases that have come to light, slowing down high-value transactions may be justified. The regulator has indicated that merchant transactions via UPI, card-based and net banking payments, and cheque-based transactions would be kept out of the scope of delayed processing. Therefore, the economic impact of the move would be minimised. However, if implemented, these changes could add upfront costs for banks and payment gateways. The industry fears that payment infrastructure will have to be re-engineered to support conditional holds, exception handling and safeguards such as trusted-person authentication. These may not be minor adjustments, as they could affect core transaction processing systems optimised for instant payments.
Given the high reputational and monetary costs associated with fraud, there is merit in striking a fine balance between safety and speed in digital transactions. The only question is where line would be drawn.