UPI just had its 4th outage in 20 Days — what’s going on?

UPI, the system that basically runs digital India, has been acting up—and not in a small way. On April 12, it went down for the fourth time in just 20 days. That’s not just annoying, it’s borderline chaos in a country where over 40 crore people rely on UPI for everything from your making small payments to roadside vendors to utility bills.

Every time UPI glitches, it doesn’t just mean a failed payment or two. Even a one-minute outage affects around 4 lakh transactions. Stretch that to ten minutes, and you’re looking at nearly 40 lakh failed transactions. Most of these aren’t just people sending rent to their flatmate either — about 65% of UPI traffic today comes from merchant payments. That’s shops, online checkouts, delivery apps — real-world commerce, grinding to a halt.

So, what’s actually breaking?

Of the four recent outages, two were reportedly caused by issues within banks, while the other two were linked to NPCI’s own systems — though it’s not entirely clear which ones. Either way, it’s not a great look for a platform that’s become India’s default way to pay for, well, everything
What makes this even more interesting is that April 12 wasn’t even a record-breaking day in terms of volume. So it’s hard to blame the outage on sheer overload.

Having said that, UPI traffic has exploded. In March 2024, UPI transactions grew by a staggering 13.6%. That’s 18.3 billion transactions in one month. And let’s be honest — not all banks are built the same. Some can handle the load, others… not so much.

Not all banks are equal

Even if NPCI is solid, your transaction still depends on your bank’s systems playing nice. And some banks are seriously slacking. According to a recent report by Moneycontrol, SBI’s technical decline rate (that’s bank-speak for transactions that fail due to server issues) hit 0.9% in March. That’s miles ahead of private players like HDFC or Axis Bank, which stay below 0.1%.

The wild part? Other public sector banks like Union Bank and Bank of Baroda actually performed better than SBI. But a few others — Canara Bank, PNB, Bank of India — continue to clock higher failure rates, occasionally even worse than SBI.

What now?

Some former bankers and fintech leaders say this is a wake-up call to bring back the NUE (New Umbrella Entity) discussion — a plan to create alternatives to UPI for redundancy. Not to replace UPI, but to make sure everything doesn’t break when one part goes down.

Because right now, all it takes is a hiccup at NPCI or one overloaded bank — and suddenly, your momo stall, your cab app, and your grocery checkout are all out of service.