The beginning of December is starting to become a nightmare for the Indian banking and digital payments industry, with multiple complaints of transaction failures coming in from consumers.
Industry sources said that the first two days of December have seen a genuine problem of transaction failures on the Unified Payments Interface (UPI) and other payment methods and blamed bank servers and back-end systems for the issues.
It seems the industry was never prepared for this sudden jump in digital payments in the wake of the pandemic and their server capacity is insufficient to handle the load, said a top banker in the know of the matter.
As of October, NPCI had processed 2.2 billion UPI transactions worth Rs 3.9 lakh crore as health safety concerns pushed more people to switch to this contactless payment method. That October number represented 83 percent growth in less than six months — May 2020 had seen 1.2 billion UPI transactions.
Comparatively, debit card transactions at merchant outlets are at 352 million. For credit cards, it is at 149 million
“UPI has become so much bigger than card transactions that banks need to scale up their back ends to support this growth,” the banker quoted above said.
Many factors have driven people to use UPI, one it is contactless something of a priority in Covid times, second UPI has been coming out with major new use cases like IPO payments, recurring payments and others. Third UPI is being promoted by most of the fintech startups in their regular use cases.
People take this to social media
Even social media channels have been abuzz with complaints around transaction failures. Bipin Preet Singh, cofounder of Mobikwik, one of the most prominent digital payment apps, took to Twitter to speak out about transactions not going through on his platform.