SEBI considering secure UPI payment method for licensed market intermediaries
The Securities and Exchange Board of India (SEBI) is currently exploring the development of a new method aimed at guaranteeing secure and seamless payments within the securities market using the Unified Payments Interface (UPI). The primary goal of this initiative is to differentiate between legitimate financial intermediaries and fraudulent entities.
One of the proposed strategies involves the creation of a distinct UPI address designated for registered market intermediaries. This innovative approach aims to simplify the process for investors, enabling them to verify that their payments are directed exclusively to licensed entities. Furthermore, the suggested UPI payment threshold for capital market transactions is proposed to be increased to Rs 5 lakh per day, surpassing the current limit of Rs 2 lakh. This adjustment will be subject to periodic evaluation in collaboration with the National Payments Corporation of India (NPCI).
In an effort to combat the rising trend of unregistered entities engaging in deceitful acts, SEBI has put forth the concept of assigning a unique alphanumeric UPI ID to each approved intermediary. Such an arrangement would empower investors to ascertain that their payments reach only authorized intermediaries. Additionally, it would serve as a tool for investors to distinguish and avoid unregistered entities lacking access to this exclusive UPI handle.
To further enhance security measures, a distinctive “thumbs-up” emblem enclosed within a green triangle will be displayed upon successful payments to verified intermediaries. Conversely, the absence of this symbol will alert investors to the potential risks associated with directing payments to unauthorized entities.
Considering the collaborative nature of this initiative, the overall implementation costs are expected to remain low, as the execution process necessitates cooperation between SEBI, NPCI, banks, and registered intermediaries. Extensive consultations with various stakeholders, including NPCI, are already in progress to enhance collective awareness and understanding.
During a recent event hosted by the Institute of Chartered Accountants of India (ICAI), SEBI Chairperson Madhabi Puri Buch presented the proposed “Pay Right” initiative. This innovative approach will enable investors to verify the legitimacy of the UPI ID to which they are transferring funds through rigorous KYC (Know Your Customer) scrutiny. The primary objective of this initiative is to counteract the increasing prevalence of digital fraud, ensuring that investors can confidently confirm the authenticity of the recipients of their payments.
Buch emphasized the vital importance of integrating technology with trust as a means of distinguishing reputable financial intermediaries from deceitful entities. She emphasized that this step aims to strengthen investor confidence in the digital landscape and reinforce the integrity of the market ecosystem.
