NPCI Takes Action to Prevent UPI System Outages
The National Payments Corporation of India (NPCI) has implemented new measures aimed at limiting transaction status checks for Unified Payments Interface (UPI) transactions. A circular issued on April 26 requires banks to ensure they have systems in place to audit and restrict excessive use of the check transaction API, which was linked to the UPI outage on April 12, lasting five hours. This outage was the longest in over three years, and NPCI has attributed the issue to relentless status checks by banks.
Highlights:
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NPCI mandates banks to limit transaction status checks to prevent future outages.
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April 12 UPI outage was caused by excessive check transaction requests.
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Immediate system audits by banks to review API usage.
Limitations on Transaction Status API and Required Audits
As part of the new policy, NPCI has stipulated that banks can initiate a maximum of three check transaction status APIs, preferably within two hours from the initiation or authentication of the original transaction. The first check should occur 90 seconds after the transaction’s initiation, with additional checks possible within 45 to 60 seconds after the original transaction.
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Banks limited to initiating only three check transaction status APIs.
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First status check must occur within 90 seconds of transaction initiation.
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Banks required to audit their systems and API usage with CERT-in empanelled auditors.
Why UPI Transaction Status Checks Overload the System
The Check Transaction API is used by banks to verify the status of a transaction when there is no response from the beneficiary bank, often due to server issues. In such cases, the Payment Service Provider (PSP) bank may repeatedly check the transaction’s status at fixed intervals to determine whether to proceed with further payments. These repeated requests were a key factor behind the April 12 outage.
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Repeated transaction status checks caused the April 12 outage.
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PSP banks check transaction status when the beneficiary bank’s server fails to respond.
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UPI’s real-time processing system requires efficient handling of status checks to avoid overload.
Future Considerations: Rate Limiters and Enhanced Security
NPCI is also considering the implementation of rate limiters on certain UPI APIs to prevent excessive usage, in consultation with the UPI steering committee. This would further help maintain the stability and security of the UPI system. Rate limiters would act as safeguards to prevent overuse of certain APIs, ensuring smooth transaction processing.
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NPCI to implement rate limiters on UPI APIs after consulting the steering committee.
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Rate limiters will act as security measures to manage API usage and prevent overload.
NPCI and RBI Meet Finance Minister to Strengthen UPI Infrastructure
On April 28, Finance Minister Nirmala Sitharaman chaired a high-level meeting with officials from the Finance Ministry, Reserve Bank of India (RBI), and NPCI to review and discuss the future of the UPI ecosystem. The meeting focused on enhancing the scalability, resilience, and real-time monitoring capabilities of UPI, with the goal of ensuring uninterrupted services and improving user confidence.
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Finance Minister meets with NPCI and RBI to review UPI’s infrastructure.
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Goal set to reach one billion daily UPI transactions in the next 2-3 years.
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Focus on strengthening scalability, cybersecurity, and user experience.
UPI Faces Increased Scrutiny Due to Repeated Outages
The UPI system has experienced several outages in recent months, with four outages occurring within three weeks. Some of these outages were caused by banking system overload, while others stemmed from technical issues at NPCI, such as a hardware glitch on March 26. Despite these challenges, UPI remains a crucial part of India’s digital economy, processing an average of 550 million transactions daily and 17-18 billion transactions per month.
Highlights:
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UPI faced four outages in three weeks, impacting transaction processing.
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Some outages were caused by banking system overload or technical issues at NPCI.
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UPI handles over 550 million transactions daily, highlighting the system’s critical role.
