Latest UPI outage points to deeper systemic risks

Lakhs of users struggled to make payments on January 9. Though NPCI got things back on track in three hours, there are renewed questions over the strain on the platform, which now handles over 4 billion transactions a month, and the lopsided competition in the space



Pratik Bhakta

January 12, 2022

7 Min Read

Unified Payments Interface processes a ginormous 4.5 billion transactions a month. That’s at least 150 million transactions every day and 7 million every hour. So, when UPI suffered a glitch between 2 pm and 5 pm last Sunday, it quickly became the most-discussed annoyance, online and offline, in the country.

National Payments Corporation of India, which runs UPI, tweeted at 5.18 pm that normality had returned.

“There was a hardware problem in the main server. But what made the issue acute was that the disaster recovery system didn’t kick in at the right time,” revealed a senior banker aware of the developments.

The disruption prompted renewed conversations in banking circles about the risks building up on UPI because of the concentration of operational and market power in a few hands. And how in these circumstances, there is a possibility of problems cropping up again. 

NPCI single-handedly manages UPI, the country’s most popular payments platform whose volumes have surged in recent years. Within UPI, just three players, PhonePe, Google Pay and Paytm, collectively account for roughly 95% of the market share. Banking applications play a secondary role.

A large number of users could potentially face difficulties if any one of the major participants here is hit by a serious snag. NPCI had set a 30% limit on the volume of transactions a third-party app can process, but the lopsided race makes imposing the rule a challenge.




As a premium subscriber, you will get access to 3+ premium articles a week
Limited time offer
Launch price
/ Year
INR 3,999
Save 25% with our launch offer.
Please apply the code at checkout.

copyCopy Code

Upgrade Now



As a premium subscriber, you will get access to 3+ premium articles a week

Smart Information, Better Decisions

We report on the latest and most important developments in India’s biggest tech companies and also disruptive startups so you can make better decisions.

Seasoned Team

Tracking the highs and lows of India’s biggest internet companies over the past decade has given us access to the right decision-makers to interpret the latest state of play.

Inside View with Org Charts

Know the key decision-makers with Org Charts. We thrive on decoding boardroom conversations so we can bring you a 360° view of what's happening at India's high-growth companies.

Filtering the Noise

New economy companies cannot always be evaluated using traditional methods. We analyze the relevant metrics, ask the tough questions to get you the right picture

For subscribers only

Premium Reads


View More >>

Deeply reported and objective news on the country´s fastest-growing companies and the people behind them.