(With inputs from Business Today)
Feb. 1, 2025: From February 1, 2025, a routine UPI payment might not go through—not due to insufficient funds, but because of an unexpected restriction. Any transaction ID containing special characters such as #, @, $, or * will be rejected, as per new rules issued by the National Payments Corporation of India (NPCI). This change will impact all UPI apps, enforcing compliance with a stricter format for transaction IDs.
A circular issued by NPCI on January 9 directed UPI ecosystem players to use only alphanumeric characters while generating transaction IDs. “Considering the criticality of compliance with the specifications, it has been decided not to allow any special characters in the UPI transaction ID. Any transaction with an ID containing special characters shall be declined by the central system. This shall be effective from 1 February 2025.”
The directive leaves no room for exceptions. “All participating entities are advised to take note of the above and ensure compliance. The information herein may please be disseminated to all concerned for necessary action.” This means that any app or payment service provider currently allowing special characters will need to revise their systems before the deadline.
This update comes at a time when UPI has become the backbone of digital payments in India. According to the Reserve Bank of India’s payment system report, UPI’s share in digital payments has surged from 34% in 2019 to 83% in 2024, with a compound annual growth rate (CAGR) of 74% over five years. Other payment systems, including RTGS, NEFT, IMPS, credit cards, and debit cards, have seen their collective share drop from 66% to 17% during the same period.
On a broader scale, UPI transactions have skyrocketed from 375 crore in 2018 to 17,221 crore in 2024. The transaction value has expanded just as dramatically, jumping from ₹5.86 lakh crore in 2018 to ₹246.83 lakh crore in 2024. Given this scale, the technical update to transaction IDs could affect millions of transactions daily, making compliance a priority for payment service providers.
