When Fintech firms use UPI APIs beyond just payments, challenges like data privacy, misuse, and regulatory non-compliance come to the surface. APIs designed for secure financial transactions may be exploited for unsolicited marketing or unauthorized data collection. This breaches user trust and violates data protection laws. Concerns about security vulnerabilities that potentially expose users to fraud is also a major factor.
AUPI’s primary goal which is seamless and safe transactions may also be diluted if APIs are overextended. Regulatory bodies must step in to ensure APIs are used responsibly (aligning with NPCI’s objectives). These set of challenges calls for stricter guidelines and transparent practices to maintain integrity and enable innovation. By and large, balancing convenience with security is essential for sustainable Fintech growth.
