Security News > 2023 > October > Scammers use India’s real-time payment system to siphon off money, send it to China

China-based scammers are using a combination of fake loan apps and India's real-time mobile payment system, Unified Payments Interface, to separate victims from their cash, according to a report by threat intel firm CloudSEK. "UPI service providers currently operate without coverage under the Prevention of Money Laundering Act," explained [PDF] CloudSEK researchers, letting the scammers' exploit the platforms with relative ease.

Chinese payment gateways ensure the authorities cannot pursue the scammers.

The mules change their phone numbers with their bank, thus giving the scammers control over the account and the ability to launder the money.

Last month, more than 10.5 billion transactions were made using UPI. And in February, India linked up its UPI system with Singapore's similar PayNow platform for real time cross-border payments.

"Banks and the National Payments Corporation of India must collaborate to implement additional security measures. One key initiative could involve verifying that any new mobile number added to an account matches the account holder's name, thwarting scammers from gaining control by altering phone numbers," advised CloudSEK. The intel firm also suggested UPI service providers implement additional security measures that safeguard users from fraud.

This month, India signed MoUs with the Caribbean nation of Trinidad and Tobago and Papua New Guianea to share its India Stack governance tools.

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