AI-POWERED SECURITY IN INDIA'S UPI TRANSACTIONS: EVALUATING TRANSACTION VOLUMES, FRAUD INCIDENTS, AND MITIGATION STRATEGIES

Abstract

The method of payments has evolved so much that once they were so manual and had to be made through cashiers or tellers. The modern payment methods are so easy and efficient that they could be done with just a tap of a phone. In this study we would be looking at two such innovative methods of payment and evaluate them on the basis of their adaptability in preferentially diverse markets. The study has made a humble attempt to incorporate the role played by AI in such payment methods and the impact caused by the role on the users.  NFC, which is short for near-field communication, is a technology that allows devices like phones and smartwatches to exchange small bits of data with other devices and read NFC-equipped cards over relatively short distances. The technology behind NFC is very similar to Radio-Frequency Identification (RFID) commonly used in the security cards and keychain fobs, popularly experienced at offices, hotels, gyms, etc,. Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience. Each Bank provides its own UPI App for Android, Windows and iOS mobile platform(s). The paper is based partially on secondary data and partially on primary data to assess the factors influencing the adoption of the payment systems by Indian users, to analyse the impact of AI technology and banking services and finally suggest certain policy measures to provide secured and inclusive digital transformation in banking transactions.

Key words: NFC, UPI, RFID, AI technology, digital transformation, banking transaction, inclusivity, security