UPI New Rule: A new update has come out for Unified Payment Interface (UPI) users. The National Payments Corporation of India (NPCI) has issued a new directive regarding UPI transactions. The rules related to automatic acceptance and rejection of chargebacks have been amended. The new rules will come into effect from February 15, 2025.
UPI New Rule: NPCI has decided to introduce a new auto chargeback process for transactions. Automatic acceptance and rejection of chargebacks has been implemented based on the Transaction Credit Confirmation (TCC) and ITI raised in the next settlement cycle after the chargeback is raised by the beneficiary. This process will be effective only on bulk uploads and UDIR. This process will not be applicable on front-end options.
Beneficiary banks will benefit from the new rules
Whether a chargeback will be accepted under the new rules will determine the step taken by the beneficiary bank to raise TCC or return. This change will eliminate the need for manual intervention. Currently disputes often turn into chargebacks, customers can raise chargebacks on the day of transaction itself. Because banks do not have much time to verify or process the returns. Beneficiary banks face a challenge in managing disputes well. Auto chargeback process can reduce these cases.
About Chargeback
Chargeback is generated when a completed UPI transaction is refunded due to dispute, fraud or technical glitch. It is initiated by the payer’s bank. On completion of the process, the transaction amount is credited to the payer. Such a situation arises when the customer does not recognize the payment. Dispute arises with the bank regarding the related transaction. Chargeback is also generated when the customer takes back the charges for undelivered goods. Chargeback is also generated when there is an error in transaction processing or double charging by a merchant on the same transaction. This process is different from refund. For refund, the customer requests the service provider such as UPI or the merchant. But in chargeback, the customer directly requests the bank.
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