NPCI Consider to Mask Phone Numbers on UPI Apps for Enhanced Privacy

The National Payments Corporation of India (NPCI) is asking banks and UPI application providers to make changes for reducing the amount of customer information displayed during digital payments, as per The Moneycontrol report.  

The exercise is linked to the implementation of the Digital Personal Data Protection (DPDP) Act, which places greater responsibility on organisations handling personal data.  

According to the report, NPCI is coordinating with banks and payment apps to complete the required changes across the UPI network. 

Mobile Numbers to Be Partially Hidden 

NPCI has issued a circular directing banks and UPI apps to mask customer details shown during transactions. Under the new instructions, only the last four digits of a registered mobile number should be visible to the recipient.  

In QR code-based payments, the customer's mobile number should not appear after the transaction is completed. The circular also covers UPI IDs and account numbers, which are to be masked wherever they are displayed on customer-facing interfaces. 

As per the report, Banks and payment service providers have reportedly been given until September 4 to implement the changes. 

Change in UPI Registration Process 

The circular also introduces a change in the way new UPI IDs are created. At present, many users select their registered mobile number as their Virtual Payment Address (VPA), even though username-based VPAs have always been available.  

NPCI has instructed payment applications to make username-based VPAs the default option during registration instead of mobile number-based IDs. 

The change is expected to reduce the use of mobile numbers as UPI identifiers while keeping the existing payment process unchanged. 

DPDP Compliance Behind the Move 

UPI transactions depend on mobile numbers to identify and authenticate users. However, under the DPDP framework, mobile numbers and names are treated as personal data that require stronger safeguards.  

NPCI is holding discussions with banks and payment service providers to define their responsibilities and ensure systems meet the new compliance requirements. 

This also follows complaints from users, including women, who reported concerns over privacy and unwanted contact after their mobile numbers were visible during UPI transactions. 

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Conclusion 

The revised guidelines require banks and UPI applications to limit the display of personal information without changing the payment experience. The measures are expected to be implemented across the UPI ecosystem before the September 4 deadline. 

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