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Using UPI to transfer money? Here's what NPCI has declared regarding UPI payment within the same bank account

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Users of the UPI (Unified Payment Interface) app will no longer be able to initiate intra-transfer transactions using the same UPI ID attached to one bank account. In other words, users cannot transfer money from a UPI ID to the attached UPI account, or in some cases, within the same UPI account (if you have two UPI IDs attached to the same bank account). 

The new rule will be implemented from August 1 by the National Payments Corporation of India (NPCI). It is a step to regularise UPI payment transaction and overall curb the artificial inflation of transactions and user load on the service platform. 

Related: How digital payment methods are changing the face of the Indian economy 

As implied in an NCPI circular published by ET Tech, the UPI payment gateway will no longer allow transactions where the payer and payee have the same bank account. In other words, when the payer and the payee are the same, there can be no transaction initiated using the same bank account number. 

Related: UPI: Here's what you must know about this new-age payment mode 

“While analysing the transaction patterns we have observed instances wherein both credit and debit accounts are the same. Customers are sending money from their account to the same account; these transactions do not serve any use case and also add unnecessary load on the system,” the circular said. 

NPCI has confirmed that all such transactions will be initially blocked in the UPI central system. It has directed banks, fee service suppliers, and payment service providers to block such duplicate transactions related to an identical checking account. 

Related: How Unified Payment Interface (UPI) can change the way you bank

As mentioned in the ET report, the reason for the rise in such repeated transactions can be attributed to non-banking personal entities vying for a share of the UPI platform. Some gamers, for example, have been providing cashbacks to entice users. This results in UPI-based shoppers performing a number of transactions, mostly pointless ones. 

By bringing down the number of such repeated transactions, NCPI is hoping to bring down the load on the UPI service system. The platform has reported an increase in failure rates of transactions, which can be a direct result of repeated, low-value transactions using the UPI service. Hence the need to focus on genuine transactions.

Related: 10 Things you must know about the BHIM App 

Users of the UPI app can soon expect an improved platform experience. Since the number of duplicate or repeated transactions will reduce, the UPI payment gateway will carry less load and offer a hassle-free experience. User should no longer experience slow download and upload speeds, and functions will most likely work much faster.

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