UPI & Digital Payment Fraud Forensics

1. What is UPI?

UPI (Unified Payments Interface) is an instant payment system that enables users to transfer money between bank accounts through a mobile application using identifiers such as a UPI ID, mobile number, QR code, or other supported payment mechanisms.

The important forensic point is that a UPI transaction is not just a payment on a phone. It can generate evidence across multiple systems:

Victim's device → UPI/payment app → PSP/bank → NPCI infrastructure → beneficiary bank → beneficiary account/device

Therefore, investigating a UPI fraud often requires correlating evidence from several sources.

2. What is Digital Payment Fraud Forensics?

Digital Payment Fraud Forensics is the systematic collection, preservation, examination, analysis and presentation of digital evidence associated with fraudulent financial transactions.

It combines:

• Digital forensics
• Mobile forensics
• Banking transaction analysis
• Network/log analysis
• OSINT
• Financial intelligence
• Cybercrime investigation
• Evidence preservation
• Timeline reconstruction

Who initiated the transaction, from which device/account, through which application or infrastructure, where did the money go, and who ultimately controlled the receiving account?

3. Why UPI Fraud Investigation Is Different

Traditional financial investigation may primarily focus on:

Account → Transaction → Beneficiary

A cyber-forensic investigation can go much deeper:

Victim → Phone → SIM → UPI application → Device identifiers → Authentication event → Transaction → UPI ID → Bank account → Mule account → Subsequent transfers → Cash withdrawal/crypto conversion → Suspect

This makes digital evidence correlation extremely important.

NPCI's fraud-related procedures demonstrate the importance of transaction details, investigation reports and relevant logs in payment-fraud investigations.

4. Major Types of UPI & Digital Payment Fraud

A. UPI Phishing

The victim receives a fake:

• Bank message
• KYC notification
• Refund message
• Account-blocking warning
• Customer-care message
• Payment request

The attacker attempts to obtain credentials or convince the victim to perform a transaction.

Forensic evidence

Investigators may examine:

• SMS
• WhatsApp/Telegram messages
• Email
• URLs
• Browser history
• Call logs
• Screenshots
• Payment-app records
• Device artifacts
• Bank transaction records

5. Fake Customer-Care Fraud

A victim searches for customer support online and contacts a fraudulent number.

The fraudster may convince the victim to:

• Install a remote-access application
• Share sensitive information
• Approve a payment
• Enter a UPI PIN
• Scan a QR code
• Perform a "verification" transaction

Investigation

Investigators should correlate:

Search history → fake website/social-media profile → phone number → communication → remote-access activity → transaction → beneficiary account

This is a good example of why mobile + OSINT + financial forensics need to work together.

6. QR-Code Fraud

QR codes themselves are not inherently fraudulent, but criminals can manipulate the payment process by presenting a QR code that directs money to an unintended recipient.

Evidence can include:

• QR image
• QR-generation source where available
• UPI ID encoded in QR
• Messages containing the QR
• Website/page hosting the QR
• Transaction ID
• Recipient account
• Device/application evidence

A forensic examiner should preserve the original QR image rather than relying only on a screenshot.

7. UPI Collect/Payment-Request Fraud

A fraudster may send a payment request while misleading the victim about its purpose.

The investigator should determine:

• Who initiated the request?
• Which UPI ID was involved?
• When was it generated?
• What was the amount?
• What message/remark accompanied it?
• Did the victim knowingly authorize it?
• What device was used?
• Where did the funds go afterward?

8. SIM-Swap & Account-Takeover Fraud

This is particularly important in digital-payment investigations.

A criminal may compromise a victim's mobile-number control and subsequently attempt to access financial services.

Investigators may examine:

Telecom evidence

• SIM replacement records
• SIM activation/deactivation
• Subscriber details
• Cell-site information obtained lawfully
• Device/IMEI associations
• Relevant call/SMS records

Banking evidence

• Login records
• Authentication events
• Device registration
• Transaction records
• Beneficiary additions
• Account changes

The objective is to establish whether the victim's normal device/SIM activity changed around the time of the fraud.

9. Social Engineering Payment Fraud

In many cases, the technology isn't "hacked."

Instead, the victim is manipulated into authorizing the transaction.

Examples include:

• Fake investment schemes
• Fake job offers
• Fake police/government calls
• Fake delivery refunds
• Fake KYC updates
• Fake loan applications
• Fake customer support
• Romance/investment scams

From a forensic perspective, communication evidence becomes extremely important.

10. Mule Account Fraud

This is one of the most important concepts for financial cybercrime investigation.

A money mule is an account used to receive or move illicit funds on behalf of another person or group.

RBI specifically warns against allowing others to use one's bank account to receive or transfer money.

A simplified flow can look like:

Victim → Mule Account 1 → Mule Account 2 → Mule Account 3 → Cash/other financial channel

The investigator therefore shouldn't stop after identifying the first beneficiary account.

11. Transaction Laundering / Layering

Criminals may rapidly move stolen funds through several accounts.

For example:

₹50,000 stolen

↓
Account A

↓
Account B

↓
Account C

↓
Wallet/merchant/other financial channel

The investigator performs transaction-chain analysis to identify:

• First recipient
• Subsequent recipients
• Amounts
• Time intervals
• Common beneficiaries
• Repeated account relationships
• Suspicious patterns

This can reveal a broader criminal network.

12. The UPI Forensic Investigation Process

Here's the most important section if you're preparing this as a cyber-forensics article or lecture.

Step 1 — Receive the Complaint

Collect the victim's statement.

Record:

• Date and time of fraud
• Amount lost
• Bank
• UPI/payment application
• UPI ID
• Transaction ID/reference number
• Victim's mobile number
• Relevant phone numbers
• Screenshots
• Messages
• Emails
• URLs
• QR codes
• Call details available to the victim
• Any downloaded application involved

13. Step 2 — Preserve the Evidence

Before examining the victim's phone, investigators should preserve evidence properly.

Important principles:

Do not unnecessarily modify the device.

Avoid casually:

• Opening applications
• Deleting messages
• Restarting unnecessarily
• Installing applications
• Changing settings
• Connecting unknown devices

Depending on the circumstances, investigators may perform appropriate forensic acquisition using validated procedures.

Preserve:

• Mobile phone
• SIM
• Memory card
• Computer
• Screenshots
• Emails
• Messages
• QR codes
• Transaction receipts
• Bank statements
• Relevant URLs
• Devices used for communication

14. Step 3 — Mobile Forensics

This is where your digital-forensics knowledge becomes particularly useful.

Potential tools include:

• Magnet AXIOM
• Cellebrite UFED
• Oxygen Forensic Detective
• MSAB XRY
• Belkasoft Evidence Center
• Autopsy for supported artifacts
• ALEAPP
• MVT for relevant supported mobile investigations

The exact acquisition method depends on:

• Device model
• OS version
• Lock state
• Encryption
• Security patch level
• Available forensic access method
• Legal authority

15. Mobile Evidence to Examine

A. SMS

Look for:

• Bank alerts
• OTP-related messages
• Fraudulent messages
• Transaction notifications
• Sender numbers
• Timestamps

B. Messaging applications

Examine relevant communications from:

• WhatsApp
• Telegram
• SMS
• Email
• Other communication platforms

Look for:

• Payment instructions
• UPI IDs
• QR codes
• Phone numbers
• URLs
• Fraudster identity
• Instructions given to victim

C. Browser artifacts

Investigate:

• Search history
• URLs
• Downloads
• Cookies where lawfully available
• Web sessions
• Visited fraudulent websites

D. Application artifacts

Examine relevant:

• UPI/payment applications
• Banking applications
• Wallet applications
• Remote-support applications
• Recently installed applications

16. Step 4 — Examine the Transaction

Every suspicious transaction should be converted into a structured record.

For example:

The transaction ID becomes a crucial pivot for requesting relevant records from the concerned entities.

17. Step 5 — Bank & Payment-Provider Investigation

Investigators may lawfully seek relevant records from:

• Victim's bank
• Beneficiary bank
• Relevant payment service providers
• NPCI-related channels/processes
• Wallet/fintech provider
• Merchant/payment intermediary

Potential records may include:

• Transaction logs
• Account details
• Beneficiary information
• KYC records
• Device information
• Login information
• Authentication records
• Relevant IP information
• Account-opening information
• Transaction history
• Linked mobile number
• Linked email
• Dispute/complaint records

The exact records available depend on the institution and applicable legal process.

18. Step 6 — Identify the Beneficiary

Suppose:

Victim → UPI ID XYZ@bank → Account A

The investigator then asks:

Who owns Account A?

Collect, through lawful investigative channels:

• KYC information
• Registered mobile number
• Email
• Account-opening information
• Linked accounts
• Transaction history
• Relevant device information

But account ownership does not automatically prove that the account holder committed the fraud.

This distinction is extremely important in forensic reporting.

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