Scams thrive on popular payments system amid cashless push in India

Instant transfers make users vulnerable to fraud; calls to put in place more safeguards

- Debarshi Dasgupta

It was a regular workday morning commute for Ms Neha Verma in Jammu in northern India. The bus was packed to the gills. Her phone rang. On the line was an avuncular-sounding stranger who sounded about the same age as her father, she said.

The man mentioned her father's name, and asked if he could send her the 13,000 rupees (S$210) that he owed her father. Crammed into the bus without a seat, Ms Verma said he could do it later.

But he insisted on repaying the money right away, as someone was helping him do so using India's popular Unified Payments Interface (UPI). Introduced in 2016, the real-time payments system allows users to transfer money instantly using their mobile phones.

The 26-year-old nurse relented empathising with someone who "knew" her father and sounded sincere - but she was about to fall for a well-crafted scam.

Ms Verma soon received an SMS telling her she had received 10,000 rupees. The message, while drafted meticulously like the ones sent by banks, came from a personal number, not the commercial SMS dispatch services that banks use.

It was a crucial detail that Ms Verma missed. She then received a message that said her account had been credited with another 30,000 rupees. Soon after, the man, who was still on the phone, said he had inadvertently sent her 30,000 rupees instead of the remaining 3,000 rupees. He then asked her to return the additional amount.

"I just didn't know in that crowd whether I should put my phone to my ear or check (the messages and my bank account)," she told The Straits Times, explaining how she was caught at a vulnerable moment. Ms Verma transferred 27,000 rupees to him without a second thought.