Scan. Pay. Done.
In under 5 seconds, your transaction is complete. But while you’re buying coffee or booking a cab, someone else is getting something even more valuable: your UPI data.
In 2025, with over 480 million Indians using UPI, your transaction history is a goldmine for fintech companies.
Let’s uncover:
What data UPI actually collects
How companies profit from it
The privacy risks involved
And how you can stay protected
What Does UPI Know About You?
Your UPI-linked digital trail includes:
| UPI Data Point | What It Reveals |
|---|---|
| Transaction Amount | Spending power, monthly budgets |
| Merchant Name/Type | Shopping habits, lifestyle preferences |
| Time of Transaction | Daily routine, work hours |
| Location (via IP/GPS) | Frequent places, home/office zone |
| Bank Details | Financial tier, salary account hints |
While the NPCI (National Payments Corporation of India) maintains basic governance, most data insights are drawn by fintech apps you use on top of UPI.
How Fintechs Use Your UPI Data to Profit
1. 🎯 Hyper-Personalized Marketing
Targeting you with loan offers right after a bill payment
Sending budget tips when your balance runs low
Promoting deals from merchants you shop at
2. 🧠 AI-Driven Credit Profiling
Estimating your creditworthiness even if you’ve never taken a loan
Building “shadow credit scores” based on spending patterns
3. 📊 Consumer Analytics
Selling anonymized user behavior data to banks, e-commerce, and market researchers
4. 💰 Cross-Selling Financial Products
Insurance, SIPs, credit cards based on your payment patterns
Fintech = Free app for you, rich behavioral data for them.
Privacy Concerns You Should Know
Lack of Awareness
Many users don’t realize how much they’re sharing. UPI apps often bundle permissions under “user consent.”
Data Brokers & Third-Party Sharing
Some platforms may sell or “share” your anonymized data with marketing firms or financial institutions.
Behavioral Surveillance
Frequent late-night payments? Could flag you as a "risky borrower" in AI scoring models.
Weak Data Protection Laws (Still Evolving)
India’s Digital Personal Data Protection Act (DPDP Act) is new and not fully enforced yet.
How You Can Protect Your UPI Privacy
✅ 1. Check App Permissions
Only allow UPI access to trusted apps like BHIM, PhonePe, Google Pay, Paytm
Avoid giving location or SMS permissions unnecessarily
✅ 2. Use Official Apps When Possible
NPCI’s BHIM is the cleanest in terms of minimal data collection
✅ 3. Disable Unused Features
Stop auto-deductions or recurring mandates if not required
Log out from inactive UPI apps
✅ 4. Read the Privacy Policy (Even Briefly)
Focus on “data sharing,” “third-party,” and “profiling” sections
✅ 5. Use Different UPI IDs for Different Purposes
Main ID for bills and essentials
Secondary for subscriptions or trials
Expert Take:
“UPI data is the new digital footprint. In the wrong hands, it’s not just about targeted ads — it’s about shaping your financial future without your say.”
— Ritu Saxena, Cyberlaw Analyst, IndiaTech Law Forum
FAQs: UPI Data Usage & Privacy
Q1. Does NPCI sell my UPI data?
No, NPCI doesn’t sell personal data. But UPI-powered apps may analyze and profit from user behavior.
Q2. Are UPI transactions encrypted?
Yes, UPI is encrypted end-to-end. But data beyond the transaction (like habits or spending patterns) can be analyzed.
Q3. Can UPI be used to create a shadow credit score?
Yes. Many fintech lenders now build AI-based risk profiles using UPI behavior, even without CIBIL scores.
Q4. What is the safest UPI app for privacy?
BHIM UPI is the most minimal in data usage. Apps like GPay, PhonePe offer convenience but collect more behavioral data.
Q5. Will India’s data protection law change this?
The DPDP Act offers a legal foundation, but enforcement and clarity on financial data are still evolving in 2025.
Conclusion: UPI Is Convenient — But Be Cautious
UPI revolutionized payments. But with every tap, swipe, or scan, you’re telling a story about your life.
In 2025, the question isn’t “Is UPI safe?”
It’s: “How is your UPI data being used?”
Take control of your data. Because in fintech, if you’re not paying with money, you’re paying with your information.
Published on : 30th July
Published by : SMITA
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