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The Challenges in the Ecosystem
UPI has transformed the way Indians pay. It’s no longer just a convenience; it’s the default rail for digital commerce, including the securities market. In FY24 alone, UPI processed over 9.7 billion transactions, with a growing share linked to trades, SIPs, and bond purchases.
But this growth has also surfaced critical challenges:
- Investor hesitation at checkout: When investors encounter a UPI ID that appears unfamiliar, they often pause, double-check, or abandon the payment altogether. At scale, this translates into lower conversion and trust.
- Fraud and look-alike IDs: Fraudsters exploit the gaps by creating misleading IDs. Without a common standard, investors can’t easily distinguish genuine intermediaries from malicious actors.
- Friction for intermediaries: Every broker, AMC, or platform uses UPI differently, creating operational headaches and reconciliation challenges for merchants and clearing corporations alike.
And even as SEBI’s mandate brings standardisation, new challenges will emerge in the transition:
- The Investor Education Gap: The system relies on investors recognising the @valid handle and green checkmark as trust markers. A large-scale education effort is needed to avoid confusion — and to ensure investors don’t fall for near-lookalike scams.
( @val1d instead of @valid)
- Hurdles for New Entrants: Startups and new intermediaries may face longer onboarding cycles, as securing exclusive @valid handles could introduce procedural delays and slow their go-to-market timeline.
- Operational Dependency on Sponsor Banks: Each handle is tied to a sponsor bank. If a bank faces downtime or technical issues, all collections through that handle are impacted, creating a potential single point of failure.
- Uniform Dispute Resolution: With new flows, a clear, standardised framework for disputes and chargebacks will be critical. Without it, intermediaries risk delays and inefficiency when resolving investor issues.
The SEBI Circular: A New Standard for UPI Payments
To fix these issues, SEBI released circular SEBI/HO/DEPA-II/DEPA-II_SRG/P/CIR/2025/86 on June 11, 2025.
The circular mandates the use of a standardised, validated, and exclusive UPI ID for investor fund collections. NPCI has supported the rollout with its own circular NPCI/UPI/OC/217/2025-26.
This is no longer optional. It is the new baseline for investor payments.
Who Needs to Comply?
The mandate applies to all SEBI-registered intermediaries collecting investor funds, including:
- Equity Brokers
- Mutual Funds (AMCs)
- Online Bond Platforms (OBPPs)
- Research Analysts (RAs) & Investment Advisers (IAs)
- Portfolio Management Services (PMS providers)
If you fall in one of these categories, adopting “Valid Handles” isn’t just recommended; it’s required.
Who Needs to Move to Valid Handles?
The SEBI mandate applies across the securities ecosystem. If you’re one of the following intermediaries, you’ll be moving to Valid Handles for investor collections.
- Equity Brokers: Make investor pay-ins safer and reduce drop-offs during trade settlements.
- Mutual Funds (AMCs): Ensure SIPs and lump-sum investments are collected seamlessly and with visible investor trust.
Online Bond Platforms (OBPPs): Build confidence in digital bond purchases with verified UPI IDs. - Research Analysts (RAs) & Investment Advisers (IAs): Collect subscription and advisory fees with a trusted, SEBI-verified handle.
- Portfolio Management Services (PMS providers): Provide high-value investors with added reassurance that funds are being directed to the intended accounts.
For each of these categories, Valid Handles provides a consistent, verified, and fraud-proof method for collecting investor payments.
The New @valid UPI ID Format
Here is how a valid UPI handle will now look.
<BusinessName>.<Suffix>@valid<bankpsp>
- BusinessName → your registered business name. Example: ABCSecurities.
- Suffix → a short code for your category, like .brk for brokers or .mf for mutual funds.
- @valid<bankpsp> → the new handle tied to your bank, like @validhdfc or @validicici.
So, if you’re ABC Securities working with HDFC Bank, your UPI ID would look like: ABCSecurities.brk@validhdfc
Key Benefits of Valid Handles
| Investor Gains | Merchant Gains |
| Safer payments Only SEBI-approved entities can issue “Valid Handles”, reducing fraud risk. | Regulatory compliance made simple Collect funds in line with SEBI’s mandate without requiring multiple system reworks. |
| Instant reassurance The green thumbs-up in the UPI app gives real-time confirmation. | Higher conversions When investors feel secure, they’re more likely to complete transactions. |
| Less confusion One clean, predictable UPI format across all intermediaries. | Fewer disputes Standardisation reduces errors and misdirected payments. |
| Confidence in digital flows Trust encourages more investors to move online. | Operational efficiency Seamless reconciliation and reporting reduce overhead. |
How Cashfree Simplifies the Transition
Moving to Valid Handles may feel like a significant change, but with Cashfree, the complexity disappears. We’ve already built the infrastructure to help you comply more quickly, operate more efficiently, and provide investors with the seamless experience they expect.
- Multi-bank access through one integration
Cashfree is integrated with all leading sponsor banks, Axis, HDFC, and ICICI, so you don’t need to build and maintain multiple connections.
This saves months of engineering effort and reduces operational risk from single-bank dependency. - Recurring-ready from Day 1
Systematic Investment Plans (SIPs) and Autopay mandates are fully supported on Valid Handles.
With recurring investments in India growing at a CAGR of 25–30% (RedSeer, 2024), uninterrupted SIPs mean you don’t lose out on a high-growth segment. - Simplified reconciliation & compliance reporting
Manage all collections in one dashboard, with automated reconciliation and built-in reporting to clearing corporations (NCCL, ICCL).
This cuts down manual errors and lowers back-office costs by up to 40% compared to manual reconciliation (based on Cashfree internal estimates). - Proven scale & compliance expertise
Cashfree is not just enabling “Valid Handles” — we’re among the first movers, working closely with regulators and leading banks to roll this out at scale. We already process millions of UPI transactions daily with 99.99% uptime, fully aligned with NPCI and RBI regulations. You don’t just get a vendor; you get a partner shaping and scaling the future of investor payments. - Dedicated compliance & technical guidance
Our team works side-by-side with yours from handle issuance to go-live, so you’re investor-ready without downtime.
This ensures your transition is not only compliant but also smooth for both investors and your operations team.
Final Word: More Than Compliance
SEBI’s mandate on “Valid handles” is about more than regulation—it’s about building confidence into every investor payment.
Just like IFSC codes made bank transfers safe and standardised, “Valid Handles” will become the universal marker of trust for investor payments.
With Cashfree, you can make this transition seamlessly — and be among the first to turn compliance into lasting investor confidence.
