WHY IS UPI SEEING FREQUENT DOWNTIMES?

What are regulators doing about it? How does the Unified Payments Interface work?

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The story so far: In March and April, the Unified Payments Interface (UPI) system went down three times, causing significant disruptions in payments on apps like GPay and PhonePe, which rely on the system. One of the downtimes was caused by individual banks flooding the National Payments Corporation of India's (NPCI) systems with transaction status checks.

How does UPI work?

UPI payments work based on an architecture that was inherited from the Immediate Payment Service (IMPS). For UPI payments to work, a bank is required to join the UPI system and allow users to access their own accounts through a linked phone number, on a Payment Service Provider (PSP)'s app, like PhonePe or GPay. Practically every commercial bank, public or private, is on the UPI system.

UPI services restored, monitoring situation closely: NPCI

UPI is designed as an interoperable system, allowing any bank's account holders to sign up for the service on any app, and even multiple apps at the same time. This resembles a peer-to-peer system, where individual banks are all talking to each other, but in reality, practically every transaction is routed through the systems of the NPCI.