The National Payments Corporation of India (NPCI) introduced an automated system to address a common issue affecting banks' UPI functionality. Previously, banks would lose access to the Unified Real-time Clearing and Settlement (URCS) system after three incorrect password attempts, requiring manual intervention from NPCI for password resets and user ID unblocking.

 

To streamline this process, which accounts for approximately 20% of all NPCI queries, three automated options have been implemented: secret question verification, OTP authentication, and multi-factor authentication. This enhancement aims to minimize service disruptions and improve system efficiency.

 

The importance of these improvements is underscored by UPI's growing prevalence in Indian financial transactions. December 2024 witnessed a remarkable 16.73 billion UPI transactions, marking an 8% increase from November's 15.28 billion transactions.

 

Interestingly, UPI's widespread adoption has triggered an unexpected cultural shift in Indian retail practices. The digitization of payments has eliminated a long-standing tradition at India's estimated 13 million kirana stores: the practice of offering toffees and candies as change. Previously, shopkeepers would offer candies when claiming a shortage of coins, but with UPI enabling exact payments, this practice has become obsolete, impacting confectionery sales at these neighborhood stores. This transformation highlights how digital payment solutions are not just changing financial transactions but also affecting traditional retail practices and consumer behaviors.