New UPI Rule: Special Characters in Transaction IDs Banned from Feb 1

Starting February 1, transactions on the Unified Payments Interface (UPI) will be subject to a new regulation that prohibits special characters in transaction IDs. The National Payments Corporation of India (NPCI) has mandated that all UPI transaction IDs must be strictly alphanumeric, ensuring compliance with updated technical specifications.

According to a circular issued on January 9, NPCI has instructed all banks and financial institutions involved in UPI transactions to enforce the new rule. Any transaction ID containing special characters, punctuation marks, or additional symbols will be considered invalid. This adjustment aligns with UPI’s technical framework and aims to streamline payment processing while enhancing security measures.

Entities participating in the UPI ecosystem, including banks, payment service providers, and third-party applications, must ensure that transaction IDs conform to the new standard. Users making digital payments through UPI should verify that their transaction IDs are in the correct format to avoid payment failures.

India’s digital payment landscape has seen exponential growth, with UPI playing a pivotal role. Since demonetization in 2016, the adoption of UPI for everyday transactions has surged. Data from December 2024 indicates that UPI transactions reached an all-time high of 16.73 billion, reflecting an 8 per cent increase from November. The total transaction value in December was recorded at Rs 23.25 lakh crore, compared to Rs 21.55 lakh crore in the previous month.

The rising adoption of UPI highlights its importance in the Indian economy, with millions of users relying on the platform for seamless transactions. Businesses, small vendors, and individuals continue to prefer UPI over traditional payment methods due to its convenience and accessibility.

With the rapid expansion of UPI, fraudulent activities have also seen an uptick. Scammers have exploited loopholes by initiating small transactions before siphoning off larger amounts from users’ accounts. The latest NPCI directive is expected to mitigate such risks by enforcing stricter transaction protocols.

Banks and payment service providers have been advised to implement necessary security measures and educate users about potential threats. The requirement for alphanumeric transaction IDs is seen as a step toward minimizing fraudulent transactions and improving overall payment security.

What Users Need to Know

From February 1, users must ensure their UPI transactions comply with the new rule. Any payment attempt with a transaction ID containing special characters will be rejected. To avoid disruptions, individuals and businesses should update their payment processes accordingly.