Battling AI Threats With AI

India's digital payments landscape has witnessed exponential growth, with over 18,000 crore transactions recorded in 2024-25.

- SASMIT PATRA

UPI transactions alone surged by 137 percent to ₹200 trillion in 2023-24.

However, this surge has been accompanied by a significant rise in digital financial frauds. Between April 2024 and January 2025, the country reported 24 lakh digital fraud incidents, amounting to losses of ₹4,245 crore, a 67 percent increase from the previous year. High-value cyber fraud cases, involving sums exceeding ₹1 lakh, have also escalated, with 29,082 such incidents causing losses of approximately ₹175 crore.

The rampant spike in financial frauds in India can be traced back to a range of contributing factors. One major driver has been the rapid shift to mobile-based and UPI platforms, which, while transformative, has outpaced user awareness and digital literacy. As a result, a large section of users remains highly susceptible to fake payment links, fraudulent apps and phishing attempts. At the same time, fraudsters are becoming more sophisticated, increasingly relying on AI-generated content, deepfakes and other advanced techniques to manipulate and mislead people.

But it's not just about individual vulnerabilities or evolving fraud tactics. Beneath the surface lies a deeper issue: systemic compliance lapses. Weak enforcement of onboarding norms, gaps in merchant verification and inconsistent application of regulatory protocols are creating blind spots across the payments ecosystem.