How do banks detect high-risk merchant activity in UPI?

Banks detect high-risk activity by monitoring patterns such as sudden increases in transaction volume, frequent refunds, multiple failed transactions, or behaviour that does not match the merchant's usual activity. Advanced tools may alert banks if something unusual happens. When flagged, banks review the merchant’s account and may temporarily restrict payments. This monitoring helps control fraud, protects customers, and keeps the UPI network secure and trustworthy.