Most of the UPI payments are done through UPI number or virtual IDs, where the person making the payment does not know the identity of the person receiving the payment. However, you will no longer be making UPI payments without knowing the identification of the beneficiary. In a recent circular dated April 24, 2025, NPCI (National Payments Corporation of India) has mandated that all UPI applications should only show the name of the ultimate beneficiary to the customer when they land on the pre-transaction page, i.e., right before making the payment. This has to be implemented by June 30, 2025.
“For P2P and P2PM transactions, UPI applications shall ensure that only the ultimate beneficiary’s name (banking name as fetched from Validate Address API) is displayed to the user on the pre-transaction details page. Names extracted from QR codes, user-defined names of the payee, or any other logic should not be displayed to the payer in the UPI app,” the circular elaborated.
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While P2P (peer-to-peer) transactions take place between 2 individuals without the need for an intermediary, the P2PM category includes small merchants or vendors operating in the unorganised sector, like your local grocery store or other such merchants.
How does this impact the consumer?
NPCI defines an ultimate beneficiary as the entity that is receiving funds (credit) in lieu of goods/services rendered directly by them. As their most recent circular now mandates, starting June 30, 2025, the name of the ultimate beneficiary, as registered in the CBS (Core Banking Solutions) software, will be the only name shown to the payer/customer.
All Indian banks use the Core Banking System (CBS), which stores customer databases and account information and facilitates real-time transactions. Hence, the “Ultimate Beneficiary Name,’ as per CBS, would refer to the name recorded in the official record and database of the payee’s bank.
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Since this name is retrieved through authorized banking APIs and cannot be modified or customized by users or apps, it serves as the most accurate and traceable identity of the payee.
At present, some UPI, or TPAP (third-party service provider), apps allow people and vendors to modify their beneficiary name, which is displayed to the end-user on these applications. This may not match with their CBS-registered name. Sometimes, UPI apps pulled the names from a QR code or created a unique alias to identify beneficiaries instead of using verified banking names.
Previously, these apps would even display the name of a beneficiary which has been saved in the sender’s contact list, which, again, may differ significantly from their CBS-registered name
Explains Deepak Chand Thakur, founder and CEO, NPST, “Until now, the name shown during a UPI transaction could vary — it might have been an alias or a merchant display name. While convenient, this approach lacked standardization and could mislead payers.”
But going forward, effective June 30, 2025, all UPI/TPAP apps will uniformly display only the bank-registered name of the beneficiary across the entire UPI ecosystem. Nicknames or manually saved names in contact lists will no longer be shown at the time of transaction.
“UPI Apps shall disable any features allowing users to modify their ‘Beneficiary Name’ for transaction purposes in the app interface,” the circular adds.
“As of now, UPI apps create an app ID, which may or may not be the name as recorded in CBS, thereby leaving scope for scammers to defraud people by creating fake display names. At present, misuse of anonymity or incomplete beneficiary information on UPI platforms is possible due to the use of such display names. This (display of name as per CBS) will act as an enabler and allow the payer to know the name and real beneficiary of the payment before effecting payment”, adds Mukesh Chand, Senior Counsel, Economic Laws Practice.
Will there be any changes in the way payments are made?
This will not significantly disrupt the existing ways of payer identification. “The change primarily impacts how the payee’s (beneficiary’s) name is displayed. The verified name will be shown to the payer before completing a transaction, minimising errors. This reduces the risk of mistakenly transferring money to an unintended recipient. Also, enhances trust and transparency during the transaction, ensuring that the money is sent to the correct individual or merchant,” explains Atul Gupta, Head of Risk & Compliance, Cashfree Payments
Rohit Mahajan, Managing Partner and Founder, plutos ONE, concurs. “There may be some, but likely minimal, initial adjustment challenges, particularly for users who are used to identifying payees through nicknames or business brand names.”
Expect a downtrend in UPI-based frauds
Presently, many frauds take place due to people or payers making payments relying entirely only on partial or misleading UPI IDs or display names that do not match with the bank records due to the absence of a mandatory CBS-based name verification requirement.
“This left ample room for UPI-based frauds where the scamster can use similar-sounding first names of established brands and dupe the customer. Such frauds can be curtailed, to a large extent, with this NPCI directive”, adds Rahul Jain, CFO, NTT DATA Payment Services India.
Now, users will see the verifiable name of the recipient before they make any payment. This will eliminate accidental transfers to unintended accounts arising from misleading display names.
“It would help users avoid being manipulated by scammers that often take advantage of modified or erroneous names to mislead payers. By forcing the only verified bank-registered name to be displayed, users can take another level of comfort that their money is transferring to the intended recipient, thus making digital payments even safer and more trustworthy,” adds Mahajan.
