Dvara Analysis Weblog | The Use of Malware in UPI associated Fraud 


Shreya R[1]

One-click frauds: An introduction

For a latest research, Dvara Analysis met with ~85 low-income, new-to-UPI customers from metro cities and small cities.[2] In these interactions, some respondents reported having misplaced cash from their account by clicking on a hyperlink obtained on their telephone. They had been satisfied that they’d not actively shared delicate monetary info akin to OTPs with anybody. In different situations, customers had clicked on some hyperlinks however didn’t have interaction with them past that i.e., didn’t actively enter any info on these hyperlinks. These hyperlinks usually allow auto-reading of OTPs or sending of messages from the SMS field whereas the PIN credentials are usually parted over a phishing web page offered in such hyperlinks.

Another experiences and our findings counsel that the hyperlinks that customers click on on can make them obtain malware (The Occasions Of India, 2020; Mint, 2022). When downloaded on to the system, this malware can glean delicate monetary info from it with out the customers’ energetic involvement. This delicate monetary info is relayed again to the fraudster who could then deploy it to grasp a wide range of frauds akin to netbanking, bank card, or UPI scams. This text focuses on how fraudsters use such malware to dupe UPI customers, the style through which these frauds are realised, the person safety threats they pose, the actions that businesses have taken, and the unfinished agenda.  

UPI’s safety structure: Can fraudsters actually bypass it?

Developed by the Nationwide Funds Company of India (NPCI), UPI is India’s most generally used digital cost infrastructure. In March 2023, UPI registered 8,685.3 million transactions of INR 14,104.4 billion in worth throughout all UPI-integrated purposes. Concurrently, the Union Ministry of Finance reported that 95,000 UPI fraud circumstances had been recorded within the 12 months 2022-23, 84,000 in 2021-22, and 77,000 in 2020-21 (Rajya Sabha, 2023). Nevertheless, the true variety of fraud incidents is probably going larger than reported as affected customers typically don’t report fraud (Blackmon, Mazer, & Warren, 2021). Provided that UPI enjoys an unprecedented market share in retail transactions and that its attain is deepening past tier 3 cities in India, it’s price analyzing how malware facilitates frauds.

As we perceive from NPCI sources, the account themselves can’t be hacked into per se. Nevertheless, vulnerabilities of the buyer are exploited; frauds in UPI are basically realised by having access to customers’ info or units to execute frauds. UPI frauds are basically the theft of cash from a UPI person’s account by way of deception or misrepresentation, executed both by way of social engineering or by the fraudster utilizing malware alongside some social engineering. To safeguard customers from fraud and unintended execution of transactions, UPI transactions are secured by a two-factor authentication (2FA) mechanism. The primary issue is the fingerprint of the cellular person’s system[3] and the second issue is the m-PIN set by the person that’s required to validate every transaction (Nationwide Funds Company of India, n.d; Nationwide Funds Company of India, 2016). Subsequently, to defraud a UPI person, the fraudster should break into each these safeguards.

That is accomplished both by way of tricking the UPI person into authorising a fraudulent transaction, as an illustration sending a ‘acquire request’ within the garb of a ‘obtain request’ or deceiving the person into making funds underneath the enticement of some positive aspects/rewards and so on. Fraudsters additionally typically use social engineering akin to impostoring as financial institution staff over telephone calls to trick customers into revealing the OTPs, m-PINs, and passwords.

Alternatively, fraudsters could resort to malware together with social engineering to acquire delicate info that permits them to take management of the person’s UPI account. Frauds, utilizing each malware and social engineering strategies, are a priority for all digital monetary companies and never distinctive to UPI (Chalwe-Mulenga, Duflos, & Coetzee, 2022). Fraudsters can goal customers of various cost programs together with bank cards, cellular banking, and cellular wallets. On account of UPI’s multi-layer safety structure, fraudsters need to get hold of a number of items of knowledge so as to defraud the person of their cash with out their information or involvement. Doubtlessly because of this, malware-aided frauds will not be widespread in UPI. A latest research by Deepstrat and The Dialogue analyzed First Data Reviews (FIR) registered with the Gurugram Cyber Police Station between August 2019 and September 2020 and located excessive prevalence of social engineering strategies as a consequence of their low price and excessive success price (Mohan, Datta, Venkatanarayanan, & Rizvi, 2022). Regardless of being much less prevalent, the incidents of fraud by way of malware are equally regarding as they will restrict the necessity for fraudsters to work together with customers, making these scams even more durable for customers to detect. Subsequent, we glance into probably the most generally used malware.

How does malware execute frauds?

Malware or malicious software program is an umbrella time period for any sort of software program deliberately designed to hurt laptop programs. Regulators and authorities have lengthy cautioned in opposition to cyber-criminals using malware to realize entry to the monetary accounts of customers (Reserve Financial institution of India, 2022). A number of kinds of malware can inflict several types of hurt or ‘threats’ on customers akin to credential publicity, surveillance and invasion of privateness, extortion, id theft, and monetary loss amongst others (Cisco).

Banking trojans are a kind of information-stealing malware generally utilized in digital cost frauds. Because the identify suggests, they’re malware-infested malicious apps within the guise of seemingly helpful apps akin to a flashlight, a sport, or a file reader (Investopedia, 2022). Nevertheless, as soon as downloaded they steal delicate info, akin to login credentials, m-PINs, and OTPs by capturing information from the person’s cellular system. Over time it could actually acquire sufficient of the person’s info to bypass 2FA (Cybereason Nocturnus, 2020). Provided that within the case of UPI frauds the objective of the attacker is to acquire info that may give them entry to offer them entry to info to interrupt into UPI 2 FA, banking trojans could be instrumental in realizing frauds. That is additionally borne out by proof: The focused apps listed within the risk report of BlackRock, a banking trojan, embrace a UPI utility (Menace Cloth, 2020).

EventBot is one other banking trojan that emerged in March 2020. It disguises itself as a helpful utility akin to Microsoft Phrase or Adobe Flash. Nevertheless, it’s able to and is deployed for studying and intercepting SMS messages, recording keystrokes, and retrieving notifications about different put in purposes and content material of open home windows (Cybereason Nocturnus, 2020).

Such malware could doubtlessly circumvent the necessity for intensive social engineering and realise profitable frauds with out the person having to actively have interaction with the fraudster by the use of actively sharing info over a telephone name. Subsequent, we look at the channels by way of which malware is distributed.

How is malware distributed?

Some frequent channels for distributing malware are:

  1. Phishing hyperlinks:

    The evaluation of FIR information by The Dialogue and Deepstrat confirmed that some frauds had been carried out by sending customers a hyperlink which, when clicked, put in malware on their units. A few quarter of the 1228 circumstances of frauds had been realized by sending hyperlinks to the affected customers. These fraudulent messages are circulated by way of SMS, instant-messaging purposes, e-mails, and social media. They’re disguised as messages from authoritative senders akin to banks or regulators and are designed to bait the recipient into clicking on the infested hyperlink. The RBI additionally cautions customers in opposition to clicking on unverified/unfamiliar hyperlinks which makes them weak to downloading malware (Reserve Financial institution of India, 2022).

  1. Malvertisements:

    Malvertisements, also called malvertising, seek advice from on-line ads that include malicious code (Middle for Web Safety). Malvertisements can exploit vulnerabilities within the person’s browser or working system to ship malware to the person’s system, akin to adware, adware, ransomware, or trojans (Middle for Web Safety). They’ll additionally trick customers into clicking on hyperlinks that obtain malware by mimicking authentic advertisements (Middle for Web Safety). For example, it was discovered just lately that hackers used promoting in Google search outcomes to arrange web sites that promoted trojan apps (Ilascu, 2023).

  1. Downloading apps from untrusted sources:

    Trojan malware is commonly disguised as authentic apps and distributed by way of third-party app shops. EventBot and BlackRock are each distributed largely by way of this channel (Menace Cloth, 2020; Cybereason Nocturnus, 2020).

  1. Juice Jacking:

    RBI additionally identifies that fraudsters use public charging ports to switch malware into customers’ telephones when related. This is named juice jacking (Reserve Financial institution of India, 2022).

  1. Insecure or faux Wi-Fi networks:  

    Fraudsters could create a faux or rogue Wi-Fi community that appears authentic and trick folks into connecting to it. As soon as related, the attacker can use the Wi-Fi connection to disseminate malware (Proof Level).

  1. Exploitation by expertise assistants:

    New-to-tech customers are prone to search help for accessing and utilizing UPI. Anecdotal proof means that as a consequence of an absence of oversight, folks offering such help typically obtain malware within the pretence of aiding (Kumar, Safety Evaluation of Unified Funds Interface and Fee Apps in India – Paper presentation, 2020). .

Previously, the excessive price of acquiring and deploying malware made it unattractive to fraudsters. Nevertheless, adjustments within the ecosystem of cybercrime are making malware simpler and cheaper to entry, distribute, and deploy. A report by HP Wolf Safety states that a rise within the provide of malware has lowered the price of cybercrime and the obstacles to entry (HP Wolf Safety, 2022). The report finds that the common value of information-stealing malware was discovered to be 5 USD. It additionally states that malware is more and more being bought within the type of Malware-as-a-Service (MaaS). Thus, patrons don’t want any experience in cybersecurity and almost anyone can administer a MaaS. The report additionally finds that malware authors are transferring past merely promoting their product to providing their mentoring companies and creating detailed playbooks on the best way to use their malware.

Implications for person safety

In vulnerability to malware frauds, there’s a digital safety divide that may have an effect on low-income, new-to-tech customers disproportionately.

First, as low-income, new-to-tech customers typically depend on help to entry digital funds, they’re weak to exploitation by unofficial help suppliers (Kumar, Safety Evaluation of Unified Funds Interface and Fee Apps in India – Paper presentation, 2020). Second, safe {hardware} and software program can typically be unaffordable to low-income people (Anthony, 2023). It has been recognized that safety issues are sometimes worse in low-priced Android telephones (Morrison, 2020). It’s because a number of lower-priced telephones are made by lesser-known producers who could not comply with a normal vetting course of (Morrison, 2020).  Furthermore, low-income customers are additionally possible to make use of older units which can be not supported with common software program updates. This elevates the probabilities of malware taking root and exposing them to elevated threats (Anthony, 2023).

Additional, fraudsters could not need to depend on customers to disclose detailed info and as an alternative use malware to steal info from their units. Most malware requires the fraudster to work together with the person solely briefly to realize entry to a tool. It’s because, even after the person installs a malicious trojan app, their authorisation is required for granting permissions that may enable the malware to realize entry to the system. Nevertheless, granting of such permissions is commonly the final interplay the banking trojan can have with the person. Upon acquiring these permissions and privileges, it could actually typically grant itself all further permissions with out requiring person’s authorisation.

Furthermore, malware typically hides its icon from the system display (McAfee, 2020). Thus, info is stolen with out the person being conscious of the malware’s presence of their system. Banking trojans additionally typically guise as apps which can be fully unrelated to funds or banking. Thus, customers will not be readily in a position to attribute monetary losses to them. Even customers are cautious about sharing credentials and PINs with impostors trying to hunt them, they could nonetheless be weak to malware assaults.

Some malware may additionally goal vulnerabilities in purposes. Whereas most banking trojans usually don’t exploit any working system vulnerabilities however trick the person into giving entry to the system, some trojans could benefit from safety flaws in third-party apps put in on the system. For example, Andorid.Ginp is a banking trojan that targets vulnerabilities in particular banking apps to overlay faux login screens on prime of authentic ones (IBM Safety Trusteer, 2019). Unsuspecting customers could also be satisfied they’re participating with authentic apps till they lose cash.

It’s fairly possible that one-click frauds reported by our respondents within the main research had been certainly realized by malware. Dvara Analysis’s work elsewhere means that the permissions that apps search for accessing varied varieties of information are warped in prolonged phrases and agreements. Much more worryingly, customers are disposed to simply accept these phrases and situations virtually by default and never register it as a salient occasion. Subsequently, customers could have solely ever clicked on the hyperlink and agreed to the phrases and situations, with out actively sharing any delicate monetary info, and located themselves shedding cash. As mentioned above, most malware is distributed by way of social engineering techniques akin to phishing, malvertisements and so on. which can not readily register as doubtful with customers.

One-click frauds, with none social engineering, are most definitely possible when hackers establish vulnerabilities within the working system’s safety features. In these situations, malware can acquire the required permissions with none person interplay. This was the case within the ‘Towelroot Exploit’ in 2016 when a vulnerability in Android allowed malware to take management of a tool with out requiring any particular permissions or person interplay (Menace Submit, 2016). Such vulnerabilities are uncommon and infrequently rapidly patched by system producers and software program builders.

Name to Motion

Measures taken to this point: The NPCI and the Funds ecosystem members are conscious of those points. On its half, the NPCI points circulars guiding members on defending customers from social engineering and different kinds of frauds.

Along with mandating person safeguards, reportedly, the NPCI additionally welcomes system members to implement user-protection safeguards voluntarily. For example, a number of UPI issuing banks scale back the transaction restrict of UPI accounts to INR 5,000 for twenty-four hours for a brand new person (HDFC Financial institution; Financial institution of Baroda; Fi). This will help restrict the loss to the person to INR 5,000, ought to there be an try by the fraudster to takeover the account. It stays to be seen if the ceiling is conservative sufficient particularly for the low-income customers. One other measure deployed by UPI purposes is to disable UPI transactions on units that carry remote-access apps recognized to be instrumental in screen-takeover frauds (Singh, 2020).

Unfinished agenda: Combating the rising provide chain of malware and stopping a rise in its deployment by fraudsters requires coordinated, systematic considering on a part of a number of businesses to make sure that protocols evolve on the identical velocity as new variants of fraud.  These businesses embrace NPCI, third social gathering utility suppliers, cost service suppliers, OS suppliers, regulators, and regulation enforcement businesses. Methods to assemble intelligence on frauds and promote registration of such frauds, and a nimble authorized framework to answer them, can emerge as essential systematic levers in defending prospects from frauds.

Additionally, an intervention that may be introduced into impact instantly is investing in consciousness campaigns round technical fraud. The RBI and NPCI already put money into consciousness campaigns to teach customers about social engineering scams and the best way to keep away from them. These communications largely warn customers in opposition to sharing OTPs, PINs and different delicate info with impostors over the telephone. Related campaigns might be designed to tell customers about banking trojans and situation advisories in opposition to actions like downloading apps from unknown sources, utilizing unsecured Wi-Fi networks and public charging ports, granting permissions, and privileges to malicious apps and so on. at the same time as systematic mitigants are contemplated.


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[1] The writer is a Coverage Analyst with Dvara Analysis. The writer want to sincerely thank Beni Chugh and Lakshay Narang for his or her beneficial enter and rigorous evaluation.

[2] 85 respondents from Mumbai, Delhi, Kolhapur and Unnao

[3] A mix of the cellular quantity linked to the person’s checking account and the IMEI variety of the person’s system.

[4] Hyperlink to tweet –

Cite this weblog:


R, S. (2023). The Use of Malware in UPI associated Fraud. Retrieved from Dvara Analysis.


R, Shreya. “The Use of Malware in UPI associated Fraud.” 2023. Dvara Analysis.


R, Shreya. 2023. “The Use of Malware in UPI associated Fraud.” Dvara Analysis.

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