UPI outages: NPCI, banks working on durable solution to plug gaps

A string of outages in the Unified Payments Interface (UPI) has brought the real-time payment system developer National Payments Corporation of India (NPCI) and member banks together in search of a lasting solution to the repeated glitches.

 

The NPCI is likely to come up with a monitoring mechanism to track transaction status API (application programming interface) calls, in consultation with major payment service provider (PSP) banks, to prevent any misuse within the ecosystem, according to people aware of the matter.

 

APIs -- an essential set of protocols and tools -- enable secure data exchanges between banking systems and the UPI network.

 

The current challenge stems from the extremely high frequency of transaction status API calls.

 

Following Tuesday’s meeting that brought together the NPCI, banks, and third-party UPI applications, discussions are underway to establish optimal limits on these calls to stabilise the network’s performance.

 

On April 12, UPI services suffered their fourth disruption in three weeks. A root cause analysis conducted by the NPCI revealed that banks had been sending an excessive number of ‘Check Transaction Status’ API calls -- a strain on the system that contributed to the outage.

 

A source privy to the meeting’s deliberations noted two possible remedies for this recurring issue: Either banks self-impose limits on the number of API calls made for status checks, or NPCI intervenes to block entities found to be abusing the system’s architecture. 

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“Banks and NPCI may meet again for a review since both have to work together on this,” said one of the participants, speaking on condition of anonymity. “Any existing limits on the number of API calls made for transaction status checks are not enforced since the ecosystem works with trusted partners. If the ecosystem can define it to three per transaction, it should solve the problem.”

 

A typical UPI transaction takes 10 digital “hops” to complete -- an intricate choreography involving multiple stakeholders, including the payer’s PSP banks (such as HDFC Bank, SBI, Axis Bank, and ICICI Bank), payee PSPs, remitter banks, beneficiary banks, and NPCI itself.

 

Once funds are debited from a remitter bank and credited to a beneficiary bank, the respective transaction statuses are returned at designated points along this digital route.

 

Sources indicated that this constant, rapid-fire exchange of API calls may have overwhelmed the UPI network, particularly if one server within this complex ecosystem experienced downtime. In such cases, the system’s continuous attempts to retrieve transaction statuses can itself trigger a cascading effect, resulting in outages.

 

“Banks were sending hundreds of calls just for a single transaction which may have clogged the system,” observed an industry source. “Ultimately, the network also has its own limitations and can cater to a set size. If there is such a big load, it creates a problem.”

 

Meanwhile, the Reserve Bank of India (RBI) and the central government are closely monitoring the situation, sources added.

 

In recent weeks, the UPI system faced outages on March 26, March 31, April 2, and now April 12.

 

It had previously reported that outages on March 26 and April 2 were likely caused by a combination of network disruptions from internet service providers (ISPs), hardware malfunctions, and overloaded transaction processing systems at banks.

 

Specifically, fluctuations in telecom networks appear to have impacted UPI services on March 26, leaving users nationwide unable to process payments through both bank-backed and third-party UPI applications for over an hour. Separately, a technical issue involving software-defined wide area networks (SD-WAN) was suspected to be behind the April 2 outage.

 

The NPCI, in a series of statements on its X account, provided clarification around each disruption. On March 26, it cited intermittent technical issues that led to partial declines in UPI transactions. On April 1, it attributed service hiccups to financial year-end processing loads faced by banks, though NPCI maintained the UPI system itself remained operational. On April 2, NPCI pointed to fluctuations in success rates at some banks, leading to higher transaction latency. The most recent incident on April 12 was again described as being due to intermittent technical issues.

 

These technical stumbles have occurred even as UPI continues its remarkable growth story. In March 2025, the platform processed a record ₹24.77 trillion across 19.78 billion transactions -- the first time in its history (since its launch in April 2016) that monthly transaction value crossed ₹24 trillion and volume surpassed 19 billion.

 

For 2024-25, UPI’s transaction value surged by 30 per cent, reaching ₹260.56 trillion, compared to ₹199.96 trillion in FY24. Transaction volume jumped 42 per cent, scaling to 131.14 billion transactions, up from 92.48 billion the previous year.