4 UPI Outages in 3 Weeks: An Inside Look at India’s Digital Payments System -

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4 UPI Outages in 3 Weeks: An Inside Look at India’s Digital Payments System

In less than a month, there have been four service interruptions to India’s premier real-time digital payments system, the Unified Payments Interface (UPI). The longest system outage in more than three years occurred on April 12 and lasted for almost five hours. The National Payments Corporation of India (NPCI) has called for fast remedial action after investigations into the reason have uncovered a serious weakness in the way banks communicate with the UPI infrastructure.

The uncontrolled amount of API (Application Programming Interface) calls, particularly those required to verify transaction status, is the main cause of the issue. Banks kept sending status requests to the UPI system in an attempt to verify if funds had been successfully deducted and credited.

These restrictions were not being followed, even though NPCI norms permit a maximum of three such calls per transaction, separated by 90 seconds. As a result, the system was overloaded with redundant API traffic, which led to a cascade failure.

To stop these excessive demands, NPCI, the company that runs UPI, has not put in place a central rate limiter. Rather, it was up to individual banks to implement the rule.

According to a banker who was aware of the matter, all of the big PSP banks participated in the excessive usage of these API calls, which was against protocol. The banker claimed that none of them followed the regulations. “This served as everyone’s wake-up call.”

The NPCI and major PSP banks, such as HDFC, SBI, ICICI, and Axis Bank, have called emergency meetings in response to the April 12 outage. Hard restrictions on the quantity of API calls per transaction are one of the main ideas that have been proposed. According to a different idea, NPCI might start banning systems that misuse the architecture of the network. To examine and put into place a formal monitoring system, the stakeholders can get together once more.

Up to ten digital handshakes are involved in a normal UPI transaction, involving the NPCI itself, the payer’s and payee’s PSPs, and the remitter and beneficiary banks. Banks frequently resend transaction status queries to confirm results in the event that any server in this intricate network experiences delays or outages. Despite its good intentions, this retry logic backfired on April 12 when the system was overloaded with too many queries at once.

Unlike card transactions, which settle in batches, UPI was designed for real-time processing, which made the situation worse. The platform handles over 550 million UPI transactions daily, accounting for over 83 percent of all digital transactions in India. This puts a tremendous amount of strain on the system’s reliability. Since the majority of these transactions are micropayments under ₹500, the core systems of banks are further taxed because they are not built to manage such quantities in real time.

The NPCI has instructed banks to consult the raw data files, which include the verified status of transactions, which are sent out every two hours. According to NPCI, these files ought to act as the “source of truth” rather than inundating the system with countless API requests.

UPI is still expanding at a record rate in spite of these problems. For the first time, the platform processed 19.78 billion transactions totaling ₹24.77 trillion in value in March 2025, surpassing ₹24 trillion in value and 19 billion in volume. UPI processed ₹260.56 trillion in transactions over the entire fiscal year 2024–2025, a 30% increase over the prior year. Transaction volume increased from 92.48 billion in FY24 to 131.14 billion, a 42 percent increase.

However, this success story is clouded by the current outages. The central government and the Reserve Bank of India are keeping a careful eye on the situation. It is therefore considered vital to find a long-term solution, not only to preserve UPI’s reputation but also to guarantee that India’s 400 million+ customers will always have access to digital payments.

About The Author:

Yogesh Naager is a content marketer who specializes in the cybersecurity and B2B space. Besides writing for the News4Hackers blogs, he also writes for brands including Craw Security, Bytecode Security, and NASSCOM.

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