UPI Chargeback Process Gets Automated from February 15: What You Need to Know

by gauravsinghigc

Tags : UPI chargeback process, UPI refunds automation, digital payments India, NPCI UPI update, banking technology 2025, online transaction security, fintech news | Published at : 14 Feb 2025 05:57 AM | Author : Gaurav Singh (gauravsinghigc)

Starting February 15, the UPI chargeback process will be fully automated, making refunds and dispute resolution faster. Learn how this update impacts digital payments in India.

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💰 UPI Chargeback Process Gets Automated from February 15: What You Need to Know

🔹 NPCI Implements New UPI Rules

The National Payments Corporation of India (NPCI) is set to introduce new UPI transaction rules from February 15, 2025. These changes focus on the automation of the chargeback process, ensuring faster approvals and rejections.

📜 Key Highlights of the New Guidelines:

⚙️ Automated Chargeback Approval/Rejection – Decisions will be automated based on TCC (Transaction Clearing Cycle) and Returns.
🏦 Faster Inter-Bank Processing – Chargebacks will be processed efficiently in the next settlement cycle.
🔄 Applies to Bulk Uploads – The automation affects transactions where the receiving bank uploads bulk returns.

💡 What is a Chargeback in UPI Transactions?

A chargeback is the process by which users get their money refunded in case of a disputed UPI transaction. The sending bank initiates this process, but the receiving bank doesn’t get to verify the transaction first.

⚠️ The Problem with the Current Chargeback Process

⚡ Immediate chargeback initiation – The receiving bank must check instantly.
📌 Improper Returns – Sometimes, the receiving bank ‘returns’ the amount without verifying.
🔍 Uncertainty in Transfers – A return gets recorded as a chargeback approval even when it's unclear if the transaction was valid.

🛠️ How is NPCI Solving This?

The new UPI chargeback automation ensures that:

✅ Chargeback approvals/rejections will happen automatically in the next settlement cycle.
✅ Reduces manual intervention in chargeback processing.
✅ Applies to bulk transactions where the receiving bank uploads Returns (TCC/RET).

👥 Impact on Users

For regular UPI users, this update will bring:

🚀 Faster resolution of disputed transactions.
🔄 More clarity in fund transfers.
🏦 Improved inter-bank transaction speed.

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