Certain banks were overwhelming the UPI system with excessive requests, causing it to slow down and resulting in a transaction success rate that dropped below 50 percent on April 12.
Following three significant disruptions to the UPI system in recent days, the National Payments Corporation of India (NPCI), which oversees UPI transactions, has attributed the problem to certain banks. In a communication to partner banks, NPCI explained that on April 12, UPI experienced an unprecedented surge in requests from some banks excessively utilising the “Check Transaction” application programming interface (API). This surge led to a temporary slowdown in the system and significantly reduced payment success rates for several hours. According to NPCI, success rates plummeted to around 50 percent for two hours and hovered near 80 percent for the subsequent three hours between 11:40 am and 4:40 pm on that day.
The “Check Transaction” API is employed by certain Payment Service Provider (PSP) banks to verify the status of transactions. As per an ET report, on April 12, NPCI reported that these banks were repeatedly flooding the system with requests, including those for older transactions, without waiting for responses. This behavior created congestion within the system. NPCI made attempts to isolate the problem by eliminating certain sites according to standard protocols. However, they acknowledged that these efforts didn’t fully resolve the issue, resulting in only a limited improvement in success rates.
The disruption impacted many of the leading payment platforms in the country, including Google Pay, PhonePe, and Paytm, along with various banking apps. Users were unable to complete payment transactions and were met with error messages. Around 4:15 pm, NPCI implemented a temporary fix that restored the success rate to normal levels by 4:40 pm. Additionally, NPCI urged the PSP bank responsible to halt the use of the “Check Transaction” feature as an immediate solution.
Looking ahead, NPCI plans to enforce stricter rate limits and introduce a cap on the frequency at which banks can send API requests to the UPI system. This initiative aims to prevent overload and ensure smoother operations in the future. Furthermore, NPCI will reinforce the API usage guidelines to all PSP banks. While banks have previously been given leeway to manage their API usage according to their business demands, NPCI recognises the need for tighter controls to avoid similar disruptions going forward.
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