Umer Tariq
Digital payments have transformed the way business is conducted across Kashmir, making transactions faster and more convenient than ever before. Yet a field-based study across major markets in Srinagar and Anantnag suggests that while technology has advanced rapidly, awareness of digital payment fraud has struggled to keep pace.
Interviews with 102 shopkeepers reveal how fake payment confirmations, limited knowledge of cybercrime reporting mechanisms and the exploitation of everyday trust continue to expose local businesses to financial loss.
It happens in seconds.
A customer scans a QR code, turns the phone around and flashes a familiar green message: `Payment Successful’.
The shopkeeper smiles, hands over the goods and welcomes the next customer. Only later, after checking the transaction history, does the truth emerge—the money never reached the account.
For many shopkeepers across Kashmir, this is no longer an unusual experience.
As UPI has become the preferred mode of payment in markets across the Valley, fraudsters have adapted their methods accordingly. Rather than targeting banking systems, they increasingly target human behaviour, exploiting trust, routine and the pressure of busy business hours to deceive merchants before transactions can be verified.
To better understand the scale of the problem, interviews were conducted with 102 shopkeepers across some of Kashmir’s busiest markets, including Lal Chowk, Maharaja Bazaar, Gonikhan Market, Hyderpora, Kokar Bazaar, Makkah Market and Janglatmandi. Their experiences reveal a pattern that extends far beyond isolated incidents.
More than half of the merchants interviewed reported encountering payment spoofing, one of the most common forms of UPI fraud. In these cases, fraudsters display fake payment confirmation screens or manipulated transaction messages to convince sellers that money has been transferred. By the time the deception is discovered, the customer has often disappeared with the goods.
What makes these scams particularly effective is not sophisticated technology but everyday circumstances. During peak market hours, merchants frequently serve several customers simultaneously, leaving little time to verify every transaction. Fraudsters exploit these moments of distraction, relying on confidence and urgency rather than technical expertise. A convincing payment screen presented at the right moment is often enough to earn a merchant’s trust.
Yet the conversations with traders also revealed resilience. Many merchants who had previously encountered fraud had begun changing the way they accepted digital payments. Instead of relying on screenshots shown by customers, they now verify transactions directly through their banking or UPI applications, wait for SMS or soundbox notifications, and confirm that funds have actually been credited before handing over goods. These simple habits have become an important line of defence in an increasingly digital marketplace.
Perhaps the most concerning finding was not the fraud itself but the lack of awareness about what to do after it occurs. More than 90 per cent of the merchants interviewed were unaware of the official channels for reporting cybercrime, meaning that many incidents go unreported even after financial losses are suffered. Without timely reporting, opportunities to recover funds or assist investigations become significantly more limited.
The study also included discussions with Hakeem Ajaz, Additional Secretary of Gonikhan Market, who observed that while digital payments have become an essential part of modern trade, awareness about evolving cyber fraud has not expanded at the same pace. He welcomed initiatives that promote cyber awareness and supported wider circulation of official reporting information through market associations so that traders are better equipped to protect themselves.
The project also produced an immediate impact beyond documenting the problem. During interactions with merchants, the research team shared practical guidance on recognising fake payment confirmations, verifying transactions through official banking or UPI applications, and reporting suspected fraud through the National Cyber Crime Helpline (1930). Many shopkeepers saved the helpline number on the spot, while market representatives expressed their willingness to circulate the information through traders’ networks, extending awareness beyond those who participated in the study.
The experiences shared by merchants point to a simple but important lesson. Digital payment fraud is not simply a technological issue; it is equally a challenge of awareness. Kashmir’s traders have embraced digital payments because they make business faster, easier and more efficient. Preserving those benefits will require continued investment in cyber awareness, practical safety education and prompt reporting of fraudulent activity.
Tomorrow morning, thousands of QR codes will once again be scanned across Kashmir’s markets. Most transactions will end exactly as they should—with trust rewarded and payments received. But for the few that do not, one extra moment spent verifying a transaction may prevent a costly mistake. In today’s digital economy, awareness is no longer an optional precaution. It is one of the strongest safeguards a merchant can possess.
Research Credits
Lead Author: Umer Tariq
Original Field Research: Amaine, Iqra Rashid, Dua Farooq, Kawsar Jan, Arbin Fayaz, Zenab, Mehvish Javaid, and Toiba Jan