When UPI Stumbles: What Glitches Teach Us About UX, Tech Scalability, & The Human Cost
By Rashid Ali
India's Unified Payments Interface (UPI) has emerged as the backbone of the digital economy in the country, with billions of transactions per month, allowing for easy, real-time payments to be made by hundreds of millions of users. However, over the past few months, something new has begun to happen: UPI outages are no longer exceptional interruptions—they are now almost the norm, with four major outages occurring in a little more than a month. These glitches have opened seams in the system, raising concerns regarding user experience (UX), technology scalability, and the human cost of digital dependency.
Scaling Smart: How UPI Is Navigating Unprecedented Demand
In March and April 2025, UPI suffered at least four significant outages, with the ones on March 26, April 1, April 12, and one in early May. They were each for a few minutes to a couple of hours and impacted millions of transactions and stranded people at checkout counters, public transport gates, and even hospital reception desks.
As per National Payments Corporation of India (NPCI) statistics, two of the key outages contributed as much as 282 minutes of downtime. The effect is very severe: one hour of outage is capable of affecting up to 40 million transactions, considering the daily average of nearly 600 million transactions on UPI.
Tech at Scale: How UPI Is Adapting to India’s Digital Boom
The reasons for such outages are multifaceted, but a couple of primary causes are prominent:
Banking Glitches: Most outages have been attributed to the saturation of banks' transaction-processing systems and internet service providers powering UPI data centers. Hardware failures and server overload during busy times—quarter-end or year-end, for instance—have also caused outages.
API Bottlenecks and Network Lag: The NPCI credited the April 12 outage to too many API calls, especially from some banks that kept sending requests for transaction status without waiting for the status to come back, causing congestion of the system and a sharp decline in transaction success rates. This trend of "flooding" the system can rapidly put pressure on even powerful architectures.
Surge in Transactions: UPI growth has been phenomenal, with transactions growing at a compounded annual growth rate (CAGR) of 72% from 2019-20 to 2024-25, and the active user base is now estimated to be around 450 million. This historical scale has enormously strained the underlying infrastructure.
Market Dominance: The UPI ecosystem is dominated by just two players—PhonePe and Google Pay, who together command over 83% of the market share. This concentration can amplify the impact of technical issues at a single provider, affecting a vast swath of users simultaneously.
The UX Impact of Glitches
UPI’s promise has always been frictionless, instant payments, so when the system stumbles, the user experience suffers dramatically.
Hidden Practices: Consumers have expressed ire at insipid or tardy communication from payment apps and banks during system downtimes. "Technical issues" error messages provide little reassurance or explanation, leaving users uncertain when or whether their payments will succeed.
Daily Life in Turmoil: The disruptions have real-world impact—overdue payments, delayed services, and, for business owners, lost business during prime business hours. For those who are digitally reliant, even a brief disruption can snowball into a meaningful inconvenience.
Eroding Confidence: Repeated failures erode user confidence, especially when digital payments are now the default for everything from groceries to cab rides. For many, carrying cash has become a thing of the past, making them vulnerable when digital systems go dark.
Building Robust Systems for a Growing Digital Landscape
The sudden increase in the use of UPI has also exposed a key challenge: the infrastructure needs to match its increasing demand. The persistent technical faults that halt transactions indicate an immediate need for UPI's underlying infrastructure to mature and scale accordingly. To this effect, the National Payments Corporation of India (NPCI) has itself taken proactive measures, releasing new guidelines to member banks and payment service providers to enhance system resilience. Some of these increases are better traffic management, enhanced data centre operations, and tighter controls on API usage, all intended to reduce disruptions and ensure continued smooth service.
Currently, developing a more diversified system is important to mitigate the over-concentration in a few big players. Promoting competition and dispersing the risk among a larger base of participants would make the overall system more resilient, able to better cope with demand spikes and unexpected difficulties. The Finance Ministry has also emphasised collaboration from all stakeholders, with a demand for action together to fill infrastructure gaps. Now that UPI is so important to the economy of the country, making it reliable has become something everyone prioritises and a goal that will need continuous investment and coordination in order to keep pace with the requirements of a rapidly changing digital environment.
Digital Crisis: How Failures in Systems Affect Lives and Livelihoods
As India becomes increasingly cashless, the human cost of digital outages becomes more real.
Mental Toll: Stress and frustration of unsuccessful transactions, particularly in time-sensitive scenarios, undermine trust not only in UPI but in the digital economy at large.
Economic Burden: Sellers lose sales, commuters lose rides, and necessary services get delayed. For small and medium businesses, as well as for daily wage workers, even a small delay can result in disproportionate financial loss.
Technological Divide: The hardest hit are those least comfortable with digital workarounds or lacking alternative payments, further widening the divide between city and country, tech-savvy and tech novice.
UPI outages are an alarm call. They alert us that even the best-known digital platforms are as good as their weakest link. As India's digital economy booms, making payment systems as reliable, scalable, and user-friendly as possible is not so much a technical issue—it's a matter of social necessity.
The lessons are clear: invest in robust infrastructure, prioritise transparency and user communication, and never lose sight of the human cost when technology stumbles. UPI’s success story is far from over, but its next chapter must be built on resilience, trust, and a relentless focus on the user.
(The author is the Managing Director at Ezeepay)
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