Customers often face stress when UPI transactions fail or money is sent to the wrong account, leading to long waits for refunds. However, the National Payments Corporation of India (NPCI) has introduced major changes to the chargeback system under the Unified Payments Interface (UPI), making the process quicker and more efficient.
In a June 2025 circular, NPCI allowed banks to register “Good Faith Chargebacks” without prior approval if they believe a customer’s complaint is genuine. This new rule, effective from July 15, 2025, ensures faster refunds and better dispute resolution, enhancing trust in digital payments.
Key Changes in UPI Chargeback Rules
“Remitting Banking Raising Good Faith Negative Chargeback” system introduced.
Banks can now process chargebacks without NPCI approval if the complaint is valid.
Faster resolution of failed transactions, merchant disputes, and wrong transfers.
Reduces unnecessary rejections, improving customer experience.
How It Benefits Users
Previously, banks had to manually request NPCI’s approval for chargebacks, causing delays. The new system empowers banks to act swiftly, ensuring refunds are processed within hours instead of days.
Strict Guidelines for Banks
Rules apply to failed transactions, merchant disputes, and wrongful transfers.
Misuse of the “Good Faith Chargeback” to avoid penalties will be considered a violation.
Fact Check & Why This Matters
✅ Verified Update: NPCI’s official circular confirms the July 15 implementation.
✅ User-Centric Approach: Reduces refund delays, boosting UPI’s reliability.
✅ Transparency: Banks must justify chargebacks, preventing misuse.
Final Thoughts
With these changes, NPCI aims to make digital payments smoother and more secure. Customers can now expect quicker resolutions, reducing financial stress.
Did You Know? Over 10 billion UPI transactions occur monthly in India—faster refunds will enhance user confidence in digital payments.
Stay Updated: Follow official banking channels for real-time UPI policy changes.