UPI instalment-splitting app sparks fraud and PIN fatigue debate online

A screenshot circulating on LinkedIn of a tool that claims to break a single UPI payment into instalments of up to ₹1,999 has set off a wide-ranging discussion about convenience, compliance and who ultimately pays for India's digital payment rails.

The image, shared by chartered accountant Akhil Agarwal, shows a page that asks for a UPI ID, the account holder's name and the amount, then generates separate QR codes for each instalment. In one example, ₹4,500 is divided across three QR codes. The page promises users they can "collect the full amount" while paying no fees, and claims payment details never leave the browser. Agarwal described the concept as UPI with a touch of jugaad and asked whether splitting payments into smaller amounts could help avoid charges.

The screenshot alone does not establish whether the tool works, whether it sidesteps applicable charges, or even whether it is a functioning app rather than an idea. Its authenticity could not be independently verified.

Commenters raised two main concerns. The first was practicality: one asked whether transferring ₹2 lakh would mean entering a UPI PIN roughly 100 times. The second was risk. A commenter warned that a burst of small transactions could draw bank scrutiny and "can be easily flagged for fraud" — a concern about how such activity might look, not a finding about the tool itself.

Others questioned the need for the workaround at all, pointing out that personal UPI transfers remain free. Some joked that authorities might one day levy charges based on the number of transactions; Agarwal replied to that suggestion, "Exactly, that's the catch."

The thread also turned to the funding of India's digital payment network. One participant argued the government should absorb infrastructure costs through existing tax collections, to which Agarwal said the question of who ultimately pays remained unresolved. Another suggested larger payment firms could lure users with cashback, prompting Agarwal to note that scale would become a serious advantage in such a market.

The charges under discussion apply to merchants, not to ordinary users. Under the framework taking effect on 15 October 2026, personal transfers stay free irrespective of amount, and customers making merchant payments do not bear the merchant discount rate. Specified merchant payments above ₹2,000 will attract a 0.4% MDR, capped at ₹300, while payments up to ₹2,000 and eligible small merchants remain exempt. Certain essential sectors face a flat ₹5 charge on payments above ₹2,000. The Finance Ministry has said around 96% of merchant transactions remain unaffected.

The new MDR regime is expected to create a substantial revenue pool for banks involved in processing UPI payments.