The National Payments Corporation of India (NPCI), which runs the popular unified payments interface, on April 15, met major banks and payment apps to discuss the disruptions that happened over the last three weeks, a couple of sources told Moneycontrol.
NPCI has appraised the banks and Third Party Application Providers (TPAPs) of the issues that have cropped up since March last week and has asked the ecosystem partners to use caution while discussing the outages in public.
NPCI did not respond to an email requesting details of the meeting.
UPI, which is the digital payment lifeline of India, was hit with four outages over the last three weeks. While a couple of those were due to banking system overload, two happened because of technical issues at NPCI.
NPCI has shared the root cause analysis (RCA) report of the March 26 outage with banks, who are called entity partners, but it is not a public document.
The institution has attributed the March 26 outage to a hardware glitch. According to a banker, the error happened at the NPCI switch with the banks. The meeting discussed fallback options in case any more errors happen in the future.
“NPCI has clarified to the banks that it is upgrading the UPI infrastructure and that resulted in an unexpected glitch. It seems to be an ongoing process and they want to avoid any more outages,” one of the persons said.
Four UPI outages in three weeks are probably unprecedented for NPCI. There are around 40 crore unique UPI users in the country and around 83 percent of all digital transactions happen through the real-time payment system.
UPI registers more than 550 million transactions on average every day and between 17-18 billion transactions a month. Unlike cards, which bunch up payments and use end-of-the-day settlement, UPI is a real-time payment system with the sender and receiver changing money instantly. Hence, continuous uptime is even more important and challenging for NPCI.
Every single one of these payments passes through NPCI switches and these transactions are putting pressure on the banking system. Around 86 percent of all UPI transactions were below Rs 500. The core banking solutions (CBS) of the banks are not meant to facilitate 500 million microtransactions in a day.
Even for a single UPI transaction to be successful, almost six financial organisations need to get their act together. The number of moving parts makes the job hard for NPCI. Its hands are tied when it comes to ensuring that the public sector banks are moving at the same pace as an Axis Bank or Yes Bank—quite an envious job
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