UPI Rules 2025, Effective February 15, 2025, the National Payments Corporation of India (NPCI) will implement critical updates to UPI’s chargeback and dispute resolution process. These changes aim to reduce conflicts between banks, automate transaction reversals, and align workflows with RBI guidelines. Here’s a breakdown of what businesses, banks, and users need to know.
Table of Contents
What’s Changing in UPI Transactions?
1. Automated Chargeback Acceptance/Rejection
- Chargebacks (transaction reversals initiated by remitting banks) will now be auto-accepted or rejected based on:
- Transaction Credit Confirmation (TCC) from beneficiary banks.
- Returns processed by beneficiary banks in the next settlement cycle.
- Remitting banks can no longer finalize chargebacks immediately (from T+0). The system waits for the beneficiary bank’s response post-chargeback.
2. Synchronized Timing to Prevent Conflicts
- Previously, beneficiary banks had insufficient time to reconcile transactions before chargebacks were raised, leading to RBI penalties.
- Example: If a beneficiary bank processed a return after a chargeback was already raised, the return was rejected, triggering penalties.
3. Bulk Transactions & UDIR Focus
- The rules apply only to bulk uploads and backend processes (UDIR), not front-end user transactions.
Why Were These Changes Introduced?
Key Problems Addressed:
- Overlapping Actions: Chargebacks and returns often clashed due to mismatched timelines.
- RBI Penalties: Banks faced penalties when returns were rejected due to pre-existing chargebacks.
- Manual Errors: Delays in reconciliation increased disputes and operational costs.
How the New UPI Chargeback Process Works
- Step 1: Remitting bank raises a chargeback via URCS (Unified Real-time Clearing and Settlement).
- Step 2: System checks the next settlement cycle for TCC/returns from the beneficiary bank.
- Step 3:
- If TCC/return is processed: Chargeback is auto-rejected or accepted.
- No action from beneficiary bank: Chargeback proceeds as deemed.
Impact of the New UPI Rules
| Aspect | Before Feb 15, 2025 | After Feb 15, 2025 |
|---|---|---|
| Chargeback Timing | Instant (T+0) | Post-settlement cycle |
| Bank Reconciliation | Manual delays | Automated alignment |
| RBI Penalties UPI rules 2025 | Frequent due to conflicts | Reduced significantly |
| Scalability UPI rules 2025 | Limited by disputes | Supports UPI’s growth (16.99B transactions/month) |
FAQs: New UPI Rules 2025
Q1. What is Transaction Credit Confirmation (TCC)?
TCC is a confirmation from the beneficiary bank that funds were credited to the recipient’s account. It determines chargeback validity.
Q2. How will this affect UPI users?
End-users will experience fewer transaction disputes and faster refunds due to streamlined bank processes.
Q3. Are these UPI rules 2025 applicable to all ?
No—only bulk transactions (e.g., merchant payouts) and backend UDIR processes.
Conclusion
NPCI’s UPI rules 2025 rules mark a significant shift toward automation and synchronization in India’s digital payment ecosystem. By resolving chargeback conflicts proactively, the update strengthens UPI’s reliability as it handles ₹23.48 lakh crore monthly. Banks and businesses must update their reconciliation systems to comply with the new workflow by February 15, 2025.
