New UPI Chargeback Rules to Streamline Transactions from July 15

Changes in UPI Chargeback Process

The National Payments Corporation of India (NPCI) is set to implement new chargeback regulations for Unified Payments Interface (UPI) transactions starting July 15. These modifications aim to simplify the process and reduce delays in resolving disputes.

What’s Changing in UPI?

Under the updated system, when a chargeback request is denied—often due to excessive claims, even if the dispute is valid—banks previously had to contact NPCI to whitelist the case through the UPI Reference Complaint System (URCS). However, from July 15, banks will no longer need NPCI's intervention for such cases. They can directly mark real rejected chargebacks as eligible for reprocessing without waiting for NPCI's approval.

Understanding UPI Chargebacks

A chargeback in UPI is a formal dispute raised by a user when a transaction fails or when a paid service or product is not delivered. This process allows users to request refunds from their bank or payment service provider. Banks and payment apps resolve these complaints through the UPI Reference Complaint System (URCS), which serves as a standardized platform for managing and tracking disputes.

Importance of the New Rules

This initiative is expected to expedite the resolution of UPI disputes. It grants banks greater autonomy to handle legitimate cases independently. In instances where chargebacks are incorrectly denied, users can expect quicker refunds or resolutions. This update follows NPCI's circular dated June 20, 2025, and is part of broader efforts to enhance the reliability and efficiency of digital payments in India.