Privacy-Preserving UPI Payment Tier Eligibility using Zero-Knowledge Proofs: A Multi-Predicate ZKProof-eKYC Framework for India's Payment Infrastructure

Abstract

India’s Unified Payments Interface (UPI) gates transaction limits behind Know Your Customer (KYC) compliance tiers mandated by the Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI). Unlocking the Full KYC tier currently requires users to surrender sensitive identity documents (Aadhaar, PAN, income proofs) to Payment Service Providers (PSPs). This centralized storage creates severe breach vulnerabilities and systemically violates the data minimization principle of India’s Digital Personal Data Protection (DPDP) Act 2023, Section 8(3). We present ZKProof-eKYC, the first Zero-Knowledge Proof (ZKP) framework designed specifically for payment system tier access control. By reframing KYC eligibility as a cryptographic access token, a user’s device generates a 1.5 KB non-interactive Groth16 zk-SNARK proof asserting tier eligibility. The PSP receives only a boolean result, eliminating personal data transmission and achieving DPDP Act compliance mathematically. The primary contribution is a multi-predicate Circom 2.0 circuit (≈25,000 R1CS constraints) simultaneously enforcing eleven regulatory predicates (ϕage to ϕtier) mapped across six Indian statutes. The architecture introduces five key elements: (i) an 8-leaf depth-3 Poseidon Merkle credential tree; (ii) a dualdocument commitment scheme protecting the raw PAN (singlehash) and Aadhaar (double-hash) identifiers; (iii) an EdDSAPoseidon issuer signature; (iv) a depth-20 Sparse Merkle Tree (SMT) for real-time revocation; and (v) Poseidon nonce-binding against replay attacks. A novel branch-free finite-field formula calculates NPCI’s tier limits natively: tier = 2 · ⊮[FullKYC] + (1−⊮[FullKYC])·⊮[MinKYC]. We deploy a dual-circuit framework: UPIKYCTierProof for Full KYC and MinKYCTierProof for Min KYC. Functional correctness is validated against 12 adversarial test vectors. Performance profiling projects mobile WASM generation at <400 ms, with off-chain execution measured at ≈96 ms and on-chain verification at ≈242,000 gas. ZKProofeKYC establishes the first “one credential, multiple products” ZKP architecture for national payment infrastructure.