Why do UPI payments fail? Banks are to blame, says RBI

Unified Payments Interface, commonly known as UPI, has revolutionized digital payments in India. From buying groceries to purchasing expensive gadgets, you can make payments through UPI without any charges. UPI is not limited to India anymore. It is also operational in countries like Mauritius, France, Singapore, Bhutan, Nepal, Sri Lanka, and the UAE.

Although, many times, UPI transactions fail and money gets deducted from the bank account. RBI, that is, the Reserve Bank of India, has explained the reasons behind UPI payment failures. Let’s find out why UPI payments fail and what is the process to get the money back if the payment fails.

RBI has found in its investigation that people face difficulties in making online payments due to flaws in the banks’ systems and not because of UPI or NPCI. A major reason for UPI payment failures is attributed to the weak technology of banks. NPCI, which stands for National Payments Corporation of India, operates UPI. RBI Governor Shaktikanta Das, during a press meet after the Monetary Policy Committee (MPC) meeting, stated that RBI checks for any issues related to payment systems in all cases of downtime, i.e., problems related to the payment system. It was found during the investigation that there is no problem from NPCI’s side, whereas the issue lies with the banks, which could have several reasons, and that they are addressing them.

Banking customers are facing difficulties in transactions through digital payments and cases of transaction failures are increasing, leading to financial losses. Recently, there were complaints that many investors wanted to invest in mutual funds to take advantage of the fall in the stock market on June 4. But they were unable to make transactions on the same day, resulting in them not gaining from the market decline.

According to the National Payments Corporation of India (NPCI), there were more than 45 crore UPI transactions daily on average in May. According to a report, there were 31 cases of downtime in various banks alone in May 2024, which led to payment gateways being closed for more than 47 hours. Many times, your UPI transaction fails, but money gets deducted from the bank account. The first question that comes to your mind is how will you get your refund? Let’s find out how to get the money back in case of a failed UPI transaction.

According to the information provided on the NPCI website, if a UPI transaction fails, the money will be refunded to your account. Sometimes it may take longer for the money to be refunded. If you do not receive a refund within an hour, contact the bank’s customer support, that is, customer care. The customer care executive may ask you to wait for 24 to 48 hours. If the money does not return to the account during this period, you will have to file a complaint with customer care. Usually, the money is refunded to your account within 3 to 7 working days after the complaint is received.