UPI Service Faces Outage Again: Users Report Glitches Amid Concerns Over Future Charges
UPI Glitch Strikes Again: Technical Snags Hit Transactions as Fee Debate Gathers Momentum
Unified Payments Interface (UPI), India's most widely used digital payment system, faced intermittent disruptions again on Wednesday evening, leaving users frustrated across the country. From failed grocery store payments to stuck restaurant bills, many reported being unable to complete transactions via popular UPI apps like PhonePe, Google Pay, and Paytm.
According to DownDetector, a platform that monitors service outages, over 200 users reported issues related to UPI transactions around 8:30 PM. The complaints also surfaced on social media platform X (formerly Twitter), where users expressed concerns over the frequent downtimes of the payment service.
NPCI Cites Bank-Side Technical Issues
The National Payments Corporation of India (NPCI), which operates the UPI framework, issued a clarification stating that the disruption was due to internal technical problems at some banks. While NPCI maintained that its core systems were functioning normally, it acknowledged “intermittent issues” in UPI connectivity triggered by specific banks’ backend failures.
In its statement, NPCI assured users that it was coordinating with the affected banks and that most issues had been resolved promptly. However, this marks another instance in a growing series of disruptions, raising questions about the reliability and scalability of India’s flagship digital payment infrastructure.
Flashback to April Outage
This isn’t the first time users have faced a UPI blackout in 2025. Back in April, the country experienced a widespread failure across UPI networks, disrupting digital payments for several hours. During that period, transaction failures were rampant on key platforms, inconveniencing consumers in malls, grocery stores, and restaurants alike.
Such repeated glitches have led to growing concerns over the system's ability to handle ever-increasing volumes of digital transactions, especially as India inches closer to a near-cashless economy.
UPI May Not Be Free Forever, Warns RBI Governor
Amid these operational concerns, a fresh debate over the cost of using UPI has taken center stage. On August 6, during the Monetary Policy briefing, Reserve Bank of India Governor Sanjay Malhotra clearly stated that the UPI ecosystem may not remain free for users indefinitely.
"Someone has to bear the cost — be it the government, banks, or the users. The system cannot operate on subsidies forever," Malhotra said. He emphasized that while the RBI never committed to keeping UPI free permanently, the final decision on imposing fees lies with the government.
Currently, UPI services are being subsidized, with neither banks nor service providers directly absorbing the transaction costs. But the RBI’s remarks suggest that a more sustainable model may soon be on the horizon — one where at least some costs are passed on.
UPI Records Massive Growth Despite Issues
Despite technical setbacks, UPI usage continues to soar. In July 2025, the platform processed a record 19.47 billion transactions, amounting to a total transaction value of ₹25.08 lakh crore. Compared to July 2024’s figure of ₹20.64 lakh crore, this marks a 4.3% growth on a monthly basis.
Currently, UPI contributes to over 85% of all digital payments in India, underlining its critical role in the country's digital economy. However, with great scale comes greater responsibility — and ensuring consistent uptime has now become a pressing need.
What This Means for Users
While the latest glitch was short-lived, recurring outages highlight the need for robust technical infrastructure and accountability. Users relying solely on UPI for payments are advised to keep alternative options like cards or cash handy, especially during peak hours.
As discussions around charging for UPI services gain momentum, consumers may also need to prepare for a potential shift in the way they use digital payments.
