RBI UPI Payment Delay: 1 Hour Pause For Transactions Above INR 10,000
India has seen the number of reported digital payment frauds jump more than 10-fold to 28 lakhs in just 5 years. In fact, during this period of 2021-2025, the value of losses due to such frauds jumped nearly 40 times to INR 22,931 crore.1
Taking all this into consideration amidst the fast adoption of digital payments in India, especially UPI, the RBI (Reserve Bank of India) is planning to replace instant payments with a ‘one-hour delay’ for UPI payments above INR 10,000 soon.2
Here’s all you need to know about this new mechanism and why RBI is taking such a step:
Rise Of Digital Payment Frauds In India
As per the National Cyber Crime Reporting Portal (NCRP), digital payment frauds in India have been on the rise every year.
Year | Number of frauds reported | Value of frauds (in INR Crore) |
2021 | 2.6 lakh | 551 |
2022 | 6.9 lakh | 2,290 |
2023 | 13.1 lakh | 7,465 |
2024 | 24 lakh | 22,848 |
2025 | 28 lakh | 22,931 |
Source: RBI3
From bogus call centre to deepfake-driven impersonation scams and mule account networks, fraudsters are using various tactics to commit these crimes everyday.
This has been impacting almost all sections of the society, especially the vulnerable groups like senior citizens who are often falling prey to such frauds.
That is exactly why RBI is feeling an urgent need to introduce more systems and processes to address these digital payment fraud issues by introducing extra layers of safety.
What Is RBI’s Plan To Reduce Digital Payment Frauds?
In its discussion paper, the RBI has introduced a possible idea of ‘1 hour pause’ on digital payments above INR 10,000 to curb digital payment frauds.
As per the National Cyber Crime Reporting Portal (NCRP), transactions above INR 10,000 account for nearly 45% of reported fraud cases by volume, but about 98.5% by value.
That is why INR 10,000 has been chosen as the threshold amount for this initiative, as per RBI.4
Here’s what RBI’s expected approach will be:
1. What happens during the lag period
Once a customer initiates a digital transaction above INR 10,000, a one hour lag period can be applied at the payer’s end or at the payee’s end, or even both. The RBI’s discussion paper has suggested that the lag be introduced at payer’s end only, keeping in mind the ease of implementation of this measure.
During this one hour lag period, the payer’s bank would debit the customer’s account provisionally, and the payer would, for that one hour, retain the option to cancel that transaction.
2. Why ‘one hour’ was chosen as the lag period
RBI has proposed this ‘one-hour’ lag window because of the ‘golden hour’ principle in fraud-risk management. In this, the initial period following a fraudulent transaction is critical in preventing the dissipation of funds.
That is exactly why during this period, if the payer’s bank identifies a transaction as unusual or suspicious, it may caution the payer and seek reconfirmation from him/her.
If the payer still chooses to proceed after reviewing the situation, the transaction shall be executed by the payer bank.
3. Option to override the lag period
The RBI also recognises that certain transactions may be urgent/time-sensitive, which is why it proposed an option for the payer to override the one hour lag period for a specific transaction by explicitly authorising it through a whitelisting mechanism. In case of such transactions, the lag may be allowed to be bypassed.
Moreover, the payer can be given the option to not only whitelist a transaction but also a particular payer, like a friend or family. All payments to such whitelisted payees would then not be subjected to this one hour time lag.
| Scope of inclusions | • APP* transactions done by individuals, including business accounts, e.g., sole proprietor and partnership firms). |
| Exclusions and whitelisting | • All merchant transactions (done through any mode, such as UPI, net banking, cards, etc). •Recurring payments such as e-mandates, NACH based payments, and payments through cheques. • Payers can also whitelist a particular transaction, if it is time-sensitive or for a particular payee like family or friend. |
| Transaction amount | INR 10,000 and above |
| Proposed lag period | Mandatory 1 hour lag at payer bank’s end, except for whitelisted transactions/ payee. Payers can also cancel the transaction during this 1 hour period. |
| Action expected of payer’s bank | Your (payer) bank has to seek reconfirmation from you if the transaction appears suspicious. It will also provide a facility to its customers to cancel the transaction. |
Source: RBI *An Authorised Push Payment (APP) is a transaction where a person or business directly authorizes their bank to push funds to another account, typically via digital banking or UPI. | |
Why This New Rule May Or May Not Work
While introducing this ‘one hour delay’ rule for digital payments, the RBI also addressed the possible pros and cons of this decision:
Possible advantages
1. As most fraudsters rely on creating an urgency and psychological pressure on the victim, introducing this one hour lag period at payer’s end can create that delay at the beneficiary’s end which can act as an additional layer of defence, even in case the payer’s side of control had failed or gotten bypassed.
2. This one hour lag period also slows down the movement of funds, and increases the time available for detection and intervention in cases of fraud.
3. Having such a visible and effective safeguarding mechanism through a one hour lag window gives a sense of security to users regarding the digital payment ecosystem. Such fraud risk management measures not only help retain trust in existing users but also builds trust in new users who are trying to begin their digital payments.
Possible challenges:
1. Implementing a one hour lag would require significant changes in infrastructure of banking systems and digital payment system infrastructure, including cancellation mechanisms and transaction queuing. Such changes would also involve cost and effort from parties involved in the ecosystem.
2. As per RBI’s discussion paper, this introduction of this one hour lag may become a point of conflict with the ‘core design principle of immediacy’ of digital payments. Moreover, users of digital payment modes like UPI are already accustomed to doing instant transactions, so they could find this concept of one hour delay in some transactions difficult to understand . Such new rules should be clearly communicated to the users so that there is clear understanding and no confusion.
3. Lastly, with the availability of the whitelisting option for transactions and payees, fraudsters may find a way to persuade victims to bypass this safeguard, hence reducing this overall initiative’s effectiveness.
Conclusion
With the number of digital payment frauds growing in India, it’s a no-brainer that RBI’s proposed 1-hour delay could add a much needed crucial layer of protection in this ecosystem. While it may initially seem to impact convenience to some extent, the overall aim of this proposed ‘one hour rule’ is to tackle the rising threat of frauds.
However, since a big reason why digital payments, especially UPI, have become popular is their speed, the success of this one hour lag will depend on how well the RBI and banks balance user convenience with security. While UPI users may require time to adjust, industry leaders believe that this one hour ‘cooling period’ in payment can feel safer and more reliable in the long run.
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Author: Grip Invest Editorial Team The Grip Invest Editorial Team is a group of Chartered Accountants, MBA (Finance) graduates, and Qualified Research Analysts dedicated to helping you invest smarter. We dive deep into India's fixed income landscape to deliver content that is accurate, up-to-date, and easy to understand. Whether you're exploring bonds, fixed deposits, or other fixed income opportunities, our guides cut through the noise and give you the clarity to make better financial decisions. |
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