The Unified Payments Interface (UPI) servers were down for the third time in a month, leading to transaction failures across banks and payments apps, National Payments Corporation of India (NPCI) said today.
“NPCI is currently facing intermittent technical issues, leading to partial UPI transaction declines. We are working to resolve the issue, and will keep you updated. We regret the inconvenience caused,” it said. Country’s largest lender State Bank of India (SBI), too, issued a similar statement saying the bank is facing intermittent issues in UPI and working with the NPCI for an early resolution. In March, the NPCI had two unscheduled downtimes for a total of 95 minutes.
According to Downdetector , over 2,000 people reported that their UPI transactions were not being done successfully. UPI transaction failures occur due to two reasons—NPCI’s servers being down or due to technical decline (wherein a bank server does not function properly).
What is causing the glitch
According to Amit Das, founder and CEO at Think Analytics India, while it is difficult to precisely comment on what is causing the glitch, he said UPI transaction declines have risen recently.
“It could be that complex algorithms at banks’ or NPCI’s end are flagging more suspicious or likely fraud transactions. UPI fraud / scamming has been on the rise with unsuspecting people getting scammed. Unusual activity gets flagged by fraud and transaction monitoring algorithms, same as how Visa, etc. do it for credit card transactions,” he said.
Sharat Chandra, founder, EmpowerEdge Ventures, says when UPI transactions fail multiple times in a single month, it raises serious questions about scalability of UPI, and highlights the growing need for resilient alternatives like the retail central bank digital currency (CBDC) or the digital rupee.
“CBDC offers distinct benefits compared to traditional digital payment systems — one key advantage is that transactions are final and eliminate settlement risk within the financial ecosystem. Picture a UPI system where, instead of transferring bank balances, CBDCs are exchanged directly, similar to handing over physical cash — this removes the need for interbank settlements entirely,“ he said. He added that interbank settlements are the weakest link in UPI payments and retail CBDC running on UPI rails eliminates this dependency. On the tech side, software updates, maintenance issues, stack revamps also affect the functioning of UPI.
A senior banker said technical glitches at banks end result in unscheduled downtimes, and banks’ IT infrastructure is also struggling due to surge in UPI volumes. In March, a total of 18.30 billion UPI transactions amounting to ₹24.77 lakh crore were recorded.
User complaints
As UPI services were down, users took to social media to express their views.
“The way they are treating UPI and keeping it down at random hours is getting really scary day by day. Affecting many small scale businesses and shops. Are we moving towards cash again?,” said X user Chirag Barjatya. Another X user said since most people rely on cashless transactions, a UPI technical issue becomes a significant concern.
“I was paying my CC bill. The amount got deducted and not received at bank’s end. Today is last date of payment. I called customer care. They’re saying it will take 1 day to refund. How can I pay today? Who will bear the interest charges? @NPCI_BHIM. Kindly refund now or compensate,” said another X user.