<p>The <a href="https://www.deccanherald.com/tags/upi">Unified Payments Interface (UPI)</a> suffered three outages this month, severely disrupting transactions between businesses and between individual customers. There was much confusion at retail outlets – traders and vendors were hit hard for a few hours. There have also been reports of localised glitches since then. There were six such disruptions in the past year and 21 were reported in the last five years. The National Payments Corporation of India (NPCI), which manages the system, restored it within hours but millions of users were inconvenienced. It is estimated that there are 600 million transactions taking place through UPI every day and the numbers are steadily increasing. The impact of the disruptions has been staggering. UPI is the backbone of digital transactions in India, constituting about 65 per cent of the transactions. Over 18 billion transactions took place in March, an increase of 14 per cent from the previous month.</p>.<p>Launched in 2016, UPI has been one of India’s showpiece achievements. Challenges such as demonetisation and Covid boosted its popularity and the increase in mobile phone use and digital awareness created an environment for its growth. The NPCI must keep the system free of glitches; it says it has conducted a root-cause analysis of the problem. It is assumed that a sudden spurt in transactions caused the glitch but the NPCI should have been prepared for the possibility when the transactions were showing signs of a surge. There has even been a suggestion to bring in a new entity in the digital payments sector as part of efforts to minimise risks and promote competition and innovation. Glitches and outages will hurt the credibility of the system even if they are not frequent.</p>.‘Cross-border payments stumbling block to India’s UPI outreach’.<p>Another problem is the increase in cases of fraud. Last year, it was officially stated that the monetary value of frauds in UPI had increased from Rs 573 crore in 2022-23 to Rs 1,087 crore in 2023-24. The increase in the number of transactions is likely to have caused this spike in cases of fraud and malpractices – this is a matter of concern. The NPCI has put in place strong identity verification and authentication procedures and measures based on Artificial Intelligence (AI), machine learning, and other modern technologies to ensure the highest security in the systems. It should further minimise the chances of fraud by updating the technologies and increasing vigil. UPI needs to have its stature of being a world-class payment mechanism maintained – its continued acceptance will hinge on ease of use and barriers against breaches.</p>
<p>The <a href="https://www.deccanherald.com/tags/upi">Unified Payments Interface (UPI)</a> suffered three outages this month, severely disrupting transactions between businesses and between individual customers. There was much confusion at retail outlets – traders and vendors were hit hard for a few hours. There have also been reports of localised glitches since then. There were six such disruptions in the past year and 21 were reported in the last five years. The National Payments Corporation of India (NPCI), which manages the system, restored it within hours but millions of users were inconvenienced. It is estimated that there are 600 million transactions taking place through UPI every day and the numbers are steadily increasing. The impact of the disruptions has been staggering. UPI is the backbone of digital transactions in India, constituting about 65 per cent of the transactions. Over 18 billion transactions took place in March, an increase of 14 per cent from the previous month.</p>.<p>Launched in 2016, UPI has been one of India’s showpiece achievements. Challenges such as demonetisation and Covid boosted its popularity and the increase in mobile phone use and digital awareness created an environment for its growth. The NPCI must keep the system free of glitches; it says it has conducted a root-cause analysis of the problem. It is assumed that a sudden spurt in transactions caused the glitch but the NPCI should have been prepared for the possibility when the transactions were showing signs of a surge. There has even been a suggestion to bring in a new entity in the digital payments sector as part of efforts to minimise risks and promote competition and innovation. Glitches and outages will hurt the credibility of the system even if they are not frequent.</p>.‘Cross-border payments stumbling block to India’s UPI outreach’.<p>Another problem is the increase in cases of fraud. Last year, it was officially stated that the monetary value of frauds in UPI had increased from Rs 573 crore in 2022-23 to Rs 1,087 crore in 2023-24. The increase in the number of transactions is likely to have caused this spike in cases of fraud and malpractices – this is a matter of concern. The NPCI has put in place strong identity verification and authentication procedures and measures based on Artificial Intelligence (AI), machine learning, and other modern technologies to ensure the highest security in the systems. It should further minimise the chances of fraud by updating the technologies and increasing vigil. UPI needs to have its stature of being a world-class payment mechanism maintained – its continued acceptance will hinge on ease of use and barriers against breaches.</p>
