Indian High Court Seeks Response on 'Accept/Decline' Option for Digital Payments

The Allahabad High Court in India has issued a notice to the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) regarding a plea that seeks an 'accept or decline' option for incoming digital payments. The court's Lucknow Bench passed the order on August 24, 2026, after hearing a Public Interest Litigation (PIL).

The petition, filed by advocate Anupriya Agarwal, challenges the current system where recipients of digital payments lack control over incoming transactions. The plea argues that individuals should have the ability to choose whether to accept or decline a payment before it is credited to their account. While payers can initiate and authenticate transactions, recipients generally cannot make a transaction-specific choice prior to receiving funds.

The petitioner is seeking directions for the RBI to establish guidelines mandating an "Accept/Decline" mechanism. This is proposed as a measure to enhance customer protection, financial autonomy, and prevent the misuse of electronic payment systems. The move aims to provide account holders with more control, particularly in situations where they may not wish to receive certain payments.

The case also touches upon the issue of "mule accounts," which are used to transfer illicit funds through various digital channels, including UPI. The petitioner suggests that a recipient-side control could help prevent the freezing of legitimate accounts that are inadvertently used in fraud investigations. However, introducing such a step could potentially slow down the instant payment system.

This legal development raises questions about the balance between user control, transaction speed, and security within India's rapidly growing digital payment landscape. The court's decision could influence future regulations governing digital transactions.