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Reverse penny drop verification is a service provided by Cashfree Payments that allows you to verify bank account details by requesting a small transaction of one rupee from the account holder. After successful verification, the amount is refunded to the customer’s account within 48 hours. Users can verify their bank account by launching any UPI app installed on their device.
Enhanced Security: Adds an extra layer of security to the customer verification process. It ensures that the bank account belongs to the user and reduces the risk of fraudulent activities.Reduced Chargebacks: By confirming the authenticity of the bank account, businesses can significantly reduce the likelihood of chargebacks due to unauthorised transactions or incorrect bank details.Compliance: Many industries, especially in finance and fintech, are subject to regulatory requirements that necessitate thorough identity and account verification. Reverse penny drop helps businesses stay compliant with these regulations.Improved User Experience: It simplifies the verification process for users, making it convenient and efficient. Users don’t need to provide extensive documentation, and verification can often be completed within minutes.Cost Savings: By reducing the need for manual verification processes and minimising the risk of fraudulent accounts, businesses can save on operational costs and potential financial losses.
Quick and Easy Verification: Users can verify their bank accounts without the need for lengthy paperwork or physical visits to a bank branch. It’s a hassle-free process that can be completed online.Increased Trust: Users can have greater confidence in the business they are dealing with, knowing that their bank account details have been verified, which can lead to higher trust levels in the platform or service.Security: Knowing that their bank account is protected against unauthorised access or fraud provides peace of mind to users, making them more comfortable with sharing their banking information.Faster Access to Services: Verified users can access and use services more quickly, as they don’t have to wait for manual verification processes to be completed.Reduced Errors: The penny drop method ensures that the bank account details provided are accurate, reducing the chances of errors in financial transactions.
At the moment, Cashfree reverse penny drop verification feature is available only for specific MCC codes:
  • 7322: NBFC (debt collecting agencies)
  • 6012: Mutual Funds (financial institutions - merchandise and services)
  • 6211: Security Brokers/Dealers (merchants that buy, sell, and broker securities, stocks, bonds, commodities, and mutual funds)
  • 6300: Insurance Sales, Underwriting, and Premiums
This service isn’t permitted for online gaming and e-commerce industries as per current RBI regulations.
Yes, you can optionally provide a redirect_url parameter when creating the reverse penny drop request. This URL specifies where the user should be redirected after completing the payment on the webpage. If you do not provide a redirect_url, users will be automatically redirected to www.google.com by default.
After successful verification, you receive:
  • Bank account number
  • IFSC code
  • Virtual Payment Address (VPA) used for the transaction
  • Verification status and transaction details
  • URL link to the webpage containing the generated UPI link and QR code for the reverse penny drop request
To enable the URL link field, fill out the Support Form or contact your account manager.
The ₹1 verification amount is automatically refunded to the customer’s account within 48 hours of successful verification.
If the verification fails, the API returns a FAILURE status. Common reasons for failure include:
  • Network connectivity issues during payment
  • Insufficient balance in the customer’s account
  • Payment timeout or cancellation by the user
  • Technical issues with the UPI infrastructure
In case of failure, no amount is deducted from the customer’s account.
Yes, users can verify accounts from any bank that supports UPI transactions. Since reverse penny drop works through the UPI infrastructure, any bank account linked to UPI can be verified using this method.
There’s no specific limit on verification attempts, but each attempt requires generating a new reverse penny drop request through the API. However, we recommend implementing reasonable rate limiting in your application to prevent abuse.
The API returns four possible status values:
  • CREATED: Request created but payment not yet made
  • SUCCESS: Verification completed successfully
  • FAILURE: Verification attempt failed
  • EXPIRED: Link expired (10 minutes) without payment
Design your application flow to handle these status appropriately and provide clear feedback to users.
Cashfree implements multiple security layers:
  • All API communications use HTTPS encryption
  • Bank account information is transmitted securely through UPI rails
  • Data is stored with industry-standard encryption
  • Access to verification data is logged and monitored
  • Compliance with PCI DSS and other security standards