Wrong UPI transfer: How to recover money sent to the wrong UPI ID

New Delhi: Unified Payments Interface (UPI) has made money transfers quicker and easier. A person doesn't have to dive into the wallet to count the notes or look for change. The quickness, however, may prove to be a bane with one missed glance. A wrong QR code, an incorrect UPI ID, or an error in the phone number can take your money to an unintended destination.

When a UPI transaction is made, the money is usually debited from the remitter's account and transferred to the beneficiary's within a very short span of time, not leaving enough time to cancel the payment or take any action. Therefore, when a transfer is made to a wrong UPI ID, a person has no other option but to raise a complaint with the application used and the concerned bank.

The recovery process begins once the person reports the incorrect transaction. However, the process is not unilateral, since it now involves two bank accounts: the remitter's and the beneficiary's. The cooperation of the beneficiary would be necessary for the successful return of the money.

The UPI app used to make the transaction has a provision to raise a complaint. The person can select the concerned transaction from the transaction history and report it. Since the transfer involves both the UPI app and the bank, reporting the money transfer through the UPI app may not be enough and could take more time to be resolved.

Once the complaint is raised with the UPI application, informing the bank is the next important step. Keep all the details needed to report the payment, such as the transaction ID, recipient's UPI ID, amount transferred, and date of transfer.

One may contact the bank's customer care and explain the situation. The bank may then take up the matter with the beneficiary's bank and facilitate the return of the money with the recipient's help. Since the process involves two banks, the remitter's bank cannot retrieve the money from the beneficiary's account on its own.

One can conclude that recovery is not guaranteed and depends on cooperation from the receiver's end.

This situation must be differentiated from failed transactions in which the money is debited from the sender's account but is not credited to the beneficiary. In that case, the recipient's bank is supposed to intervene rapidly and refund the money by the next day (T+1). The Reserve Bank of India (RBI) also directs banks to act promptly when a transfer to a merchant fails and recover the amount by the fifth day (T+5). In case of a delay, the bank has to pay a penalty of Rs 100 for each day to the customer. However, the penalty does not apply in circumstances arising out of the customer's mistake.

If the recipient does not cooperate or the banks take longer than usual to refund the money from a wrong UPI transaction, the remitter may take up the matter with the Reserve Bank of India's (RBI) Integrated Ombudsman mechanism, subject to the applicable eligibility conditions.