The Reserve Bank of India (RBI) is exploring the introduction of new safeguards in digital payment systems, including a universal ‘kill switch’ and additional transaction frictions, as part of a broader strategy to combat rising digital payment frauds and enhance customer protection.
According to the Reserve Bank of India Annual Report FY26, the central bank is evaluating measures to address the persistent challenge of authorised push payment frauds, where customers themselves initiate transactions despite existing safeguards such as additional factor authentication (AFA), payee name verification, card controls and tokenisation.
RBI explores kill switch for digital payments
The central bank said customers currently have the option to switch on or switch off domestic and international card transactions, enabling greater control over card usage. Building on this framework, RBI plans to explore a similar facility across all digital payment modes.
Additionally, the regulator is considering the introduction of a ‘kill switch’ that would allow customers to block all debit transactions from their accounts instantly.
The proposed facility is expected to strengthen consumer confidence and help curb fraudulent digital payment transactions by enabling swift preventive action when suspicious activity is detected.
AI-powered fraud detection platform underway
As part of its anti-fraud initiatives, RBI is advancing the second phase of the Digital Payment Intelligence Platform (DPIP).
The next phase involves the development of an artificial intelligence (AI) and machine learning (ML)-based risk-scoring platform designed to identify suspicious transactions in real time and strengthen fraud prevention capabilities across the digital payments ecosystem. The platform is expected to be completed during FY27.
Focus on faster settlements and wider digital adoption
The central bank also plans to explore extending direct access to RTGS and NEFT systems to additional categories of entities. The move is aimed at reducing settlement risks and accelerating transaction processing through central bank money settlement.
RBI said it will continue efforts to deepen digital payment penetration, particularly in rural and semi-urban regions, to improve last-mile connectivity and ensure inclusive access to digital financial services.
Cross-border payment connectivity remains another priority area. The regulator intends to further expand the linkage of the Unified Payments Interface (UPI) with fast payment systems in strategic partner countries to facilitate seamless, secure and cost-effective remittances and merchant payments.
Digital payments continue strong growth trajectory
India’s digital payments ecosystem recorded robust growth during FY26.
Transactions processed through the RTGS system increased by 15.7% in volume terms and 12.9% in value terms during the year.
Retail payment transactions rose 26.8% by volume and 14% by value, reflecting the growing adoption of digital payment channels across the country.
UPI retained its dominant position in the retail payments landscape, accounting for nearly 86% of total retail payment transactions during the year. UPI transaction volumes increased 30%, while transaction values grew 20.6% compared to the previous year.
The RBI also expanded the regulated payments ecosystem by authorising 23 non-bank Payment Aggregators (PAs), four non-bank Prepaid Payment Instrument (PPI) issuers, and one interoperable mobile and net banking operator during FY26.
Survey highlights growing acceptance of digital payments
As part of its policy development efforts, RBI conducted a nationwide survey on usage of digital payments covering more than 30,000 users and 10,000 merchants.
The survey found that 52% of users had adopted digital payments, with speed and convenience emerging as the primary drivers. Adoption patterns varied across age groups, income levels, gender and geography, indicating opportunities for targeted policy interventions.
Among merchants, 67% reported accepting digital payment modes, with a majority stating that digital payments had positively impacted their business operations. UPI emerged as the most preferred payment method among both consumers and merchants.
Regulatory measures strengthen payment security
During the year, RBI introduced several regulatory measures aimed at enhancing security and strengthening risk management across payment systems.
The regulator issued directions to improve due diligence processes for Aadhaar Enabled Payment System (AePS) touchpoint operators and strengthen oversight by acquiring banks.
The Master Direction on Payment Aggregators rationalised the categorisation of payment aggregators and brought online, physical and cross-border payment aggregation activities under a unified regulatory framework while prescribing enhanced merchant due diligence norms.
RBI also issued directions encouraging the adoption of new authentication technologies and mandated validation of additional factor authentication for cross-border card-not-present transactions whenever requested by overseas merchants or acquirers.
Payments Vision 2028 charts future roadmap
The central bank released Payments Vision 2028 on March 27, 2026, outlining its strategic priorities for the digital payments ecosystem through December 2028.
With plans ranging from AI-driven fraud monitoring and payment controls to expanded cross-border connectivity and broader financial inclusion, RBI is positioning India’s digital payments infrastructure for its next phase of growth while seeking to strengthen security and consumer trust