SEBI’s UPI Overhaul: What Investors and Intermediaries Must Know

Introduction: A New Chapter in Payment Security

In a major step toward strengthening payment integrity in Indian capital markets, the Securities and Exchange Board of India (SEBI) has introduced a new verification framework for UPI (Unified Payments Interface) transactions. Issued on June 11, 2025, this circular marks a significant shift in how investors will make payments to SEBI-registered intermediaries, including brokers, mutual fund houses, portfolio managers, and investment advisers.[1]

UPI, once a novelty, has become the default for many retail investors transacting in markets, funds, and IPOs.[2] Yet, this convenience has brought a new set of challenges, fraudulent UPI IDs, fake links, and untraceable payments. SEBI’s new system introduces standardised, validated, and exclusive UPI handles for intermediaries, backed by a verification tool called ‘SEBI Check’. This reform, set to go live for public use by October 1, 2025, aims to restore investor confidence by replacing ambiguity with clarity and authentication.

The Problem SEBI Is Trying to Solve

Over the past few years, UPI has completely transformed how Indians invest and transact. But with this rapid rise has come an ugly side-effect: a surge in payment scams.[3] Fraudsters have been setting up fake UPI IDs that look like legitimate brokers or mutual funds often adding a word like “invest” or tweaking a few letters to mislead unsuspecting users.[4] Then they push these IDs through social media, WhatsApp groups, or even paid ads.

The problem? These fake handles give investors no clue they’re being duped until it’s too late. And once the money’s gone, there’s rarely a clear trail to recover it.

Part of the confusion also stems from the lack of a standard naming system. One broker might use something like “abc.invest@hdfcbank”, another might go with “xyz123@okaxis”, and there’s no easy way to tell if either is even SEBI-registered.

SEBI’s new circular steps in to fix exactly this mess. By standardising UPI handles, verifying them, and clearly tagging them with a “trusted” symbol, the regulator wants to restore some much-needed clarity and trust to payment flows in the capital markets.

The New SEBI Circular: What Does It Say?

Here are the key highlights of SEBI’s June 11, 2025 circular:

Exclusive UPI IDs for Intermediaries

All SEBI-registered intermediaries must obtain a standardised and exclusive UPI ID for accepting payments from investors. These UPI IDs:

• Are unique to each intermediary.
• Follow a standard naming format: <intermediaryname>.<segment>@validbankname.
  • For example, a broker named GrowPlus would have something like growplus.brk@validhdfc.
• Are issued only by banks approved by the National Payments Corporation of India (NPCI).

The ‘@valid’ Suffix

Every verified UPI ID will end with a special suffix: @valid<bankname>. This makes it easier for investors to instantly identify authorised handles. Only authorised syndicate banks can issue such handles under guidance from NPCI and SEBI.

Visual Verification: Green Triangle + Thumbs-Up

All verified UPI handles will be displayed with a white thumbs-up icon inside a green triangle, functioning like a digital “trust mark.” This visual indicator is designed to reinforce investor confidence at the point of transaction.[5]

SEBI Check Tool

SEBI will launch an online verification utility ‘SEBI Check’[6] where investors can:

• Verify a UPI ID by scanning a QR code or entering it manually.
• Confirm the name, registration number, and bank account linked to the intermediary.
• Identify and report any suspicious or unregistered handles.

 Launch and Transition Timeline

• October 1, 2025: The verified UPI handles go live for investor use.
• 180-day transition window: Intermediaries can continue using existing UPI IDs during this period, which ends in early December 2025.
• Post-transition, only validated UPI handles will be permitted for investor payments.

How This Impacts Investors

For investors, this overhaul brings multiple benefits, but it also demands attention and adaptation.

The Upside

• Fraud Prevention: With verified handles and visible trust marks, the risk of sending money to unauthorised accounts decreases drastically.
• Clarity in Identification: A uniform UPI format like abc.ria@validicici helps immediately identify the type of intermediary (e.g., RIA, AMC, BRK).
• SEBI Check: Investors will no longer need to rely on vague confirmations; they can verify UPI IDs in seconds.

Points of Caution

• From October 1, investors must ensure they only use verified UPI IDs with the @valid… suffix. Using old or third-party handles after the transition could lead to errors or even scams.
• SEBI Check will likely become a key part of investor due diligence. While the tool promises simplicity, not all investors may immediately adapt to this new process.
• Be cautious of phishing attempts mimicking @valid handles, always cross-check on SEBI’s platform.

Investor Checklist

• Bookmark the SEBI Check page.
• Verify all UPI IDs before initiating any investment payments.
• If your broker or fund house hasn’t communicated their verified UPI ID by September 2025, reach out.
• Avoid clicking on UPI links received on WhatsApp or email. Always type or scan manually.

Implications for Intermediaries

Intermediaries, particularly those handling high volumes of investor funds, must now prioritise compliance, system upgrades, and client education.

 Key Compliance Steps:

• Apply for a verified UPI ID through the SEBI Intermediary Portal (SI Portal).
• Partner with NPCI-certified syndicate banks to generate @valid handles.
• Test the handles internally and integrate them with existing systems (websites, apps, dashboards).
• Begin investor outreach by Q3 2025 to ensure smooth adoption.

What SEBI Expects:

• Every UPI transaction initiated by an intermediary must clearly reflect the new handle and verification icon.
• Communication must be proactive: websites, invoices, emails, apps should prominently display the verified UPI ID.
• Intermediaries will also be accountable for educating their clients about the shift and guiding them to use the SEBI Check tool.

This policy also applies across the board, to mutual funds, portfolio managers, AIFs, investment advisers, custodians, clearing corporations, and more.

Wider Significance: Toward a Verified Payments Ecosystem

This UPI overhaul is more than just a cosmetic fix; it’s part of SEBI’s larger agenda to safeguard the fintech landscape.

UPI has been central to India’s digital public infrastructure. But as financial services get increasingly digitised, trust mechanisms must evolve too. SEBI’s move mirrors efforts by other regulators like:

• RBI, which is introducing tokenization, payment gateway regulation, and stricter bank compliance.
• NPCI, which is now promoting UPI Lite, UPI AutoPay, and offline UPI for feature phones, all of which also require strong validation backbones.

This initiative positions SEBI as a leader among global securities regulators embracing reg-tech and investor protection tools. In time, this verified UPI model may inspire similar reforms across insurance, pensions, and alternate investment platforms.

Conclusion: A Step in the Right Direction

SEBI’s June 2025 circular on standardised UPI handles is a bold and much-needed reform. It reflects a regulator willing to adapt, respond, and modernise alongside India’s growing digital economy.

By mandating verified UPI IDs, introducing visual trust markers, and launching SEBI Check, the regulator has taken concrete steps to reduce fraud, improve clarity, and empower investors.

Still, the success of this overhaul depends on execution. Intermediaries must act promptly, and investors must adapt. Education, awareness, and seamless technological integration will define the impact of this policy.

Come October 2025, UPI payments in the capital market will look and feel very different. For the better.

[1] ‘SEBI | Adoption of Standardised, Validated and Exclusive UPI IDs for Payment Collection by SEBI Registered Intermediaries from Investors’ <https://taxguru.in/sebi/sebi-mandates-standardized-upi-ids-investor-payments.html> accessed 17 June 2025.

[2] ‘Unified Payments Interface (UPI) Product Statistics | NPCI’ <https://www.npci.org.in/what-we-do/upi/product-statistics> accessed 17 June 2025.

[3] ‘UPI Fraud Cases Surge by 85% in FY24: Key Insights and Data – CNBC TV18’ (CNBCTV18, 25 November 2024) <https://www.cnbctv18.com/business/finance/upi-fraud-cases-rise-85-pc-in-fy24-increase-parliament-reply-data-19514295.htm> accessed 17 June 2025.

[4] ‘Zerodha’s Nithin Kamath Warns of Rising Broker Frauds as SEBI Rolls out UPI Safeguards – The Economic Times’ <https://economictimes.indiatimes.com/markets/stocks/news/zerodhas-nithin-kamath-warns-of-rising-broker-frauds-as-sebi-rolls-out-upi-safeguards/articleshow/121882280.cms> accessed 17 June 2025.

[5] Neha Joshi, ‘Sebi Introduces Verified UPI Handles for Market Payments from 1 October | Stock Market News’ (mint, 11 June 2025) <https://www.livemint.com/market/sebi-verified-upi-ids-handles-market-payments-brokers-mfs-1-october-11749644764956.html> accessed 17 June 2025.

[6] ‘Digital Shield for Investors: Sebi to Launch Verified UPI IDs for Intermediaries; “Sebi Check” Tool to Help Verify Payment Authenticity – Times of India’ <https://timesofindia.indiatimes.com/business/india-business/digital-shield-for-investors-sebi-to-launch-verified-upi-ids-for-intermediaries-sebi-check-tool-to-help-verify-payment-authenticity/articleshow/121777742.cms> accessed 17 June 2025.