UPI Gets Faster As NPCI’s New Mandates Kick In

The National Payments Corporation of India’s (NPCI) new mandates to reduce the response time for processing UPI payments kicked in on Monday (June 16). 

The new rules direct remitter banks, beneficiary banks as well as payer and payee payment service providers (PSPs) to reduce response time for UPI APIs initiated by the NPCI to as low as 10 seconds for certain transactions. 

Here is what the NPCI circular, dated April 28, states:

• For “request pay” and “response pay” APIs, the response time for banks has been revised to 15 seconds from 30 seconds earlier
• The response time for checking “transaction status” has been slashed to 10 seconds from 30 seconds previously
• For remitter and beneficiary banks, the response time for “transaction reversal” has been slashed to 10 seconds against 30 seconds previously
• The response time for “validate address (pay, collect)” APIs has been trimmed to 10 seconds from 15 seconds earlier

With this, UPI payments will become faster and users will have a streamlined customer experience. 

“(The) aforementioned revisions are intended to improve the customer experience. The members are required to ensure that they make the necessary changes in their system so that responses are handled within the revised time. If the members have any dependency/ configuration changes at partner/ merchant’s end, then the same also has to be taken care accordingly,” read the circular. 

The NPCI also directed the banks and PSPs to ensure that the changes to the response time should not adversely impact the technical decline thresholds. 

For context, a decline threshold refers to the maximum acceptable percentage of transactions that are expected to fail due to technical issues at the level of banks or NPCI. 

This comes close on the heels of the NPCI introducing new guidelines last month to impose a threshold of 50 times on checking account balance in a day to streamline operations and ease the load on the UPI system. 

The development comes days after a report surfaced that the Centre was mulling levying merchant discount rate (MDR) on digital payments above INR 3,000. However, quickly afterwards, the finance ministry quashed the report as “speculative, baseless and misleading”. 

Meanwhile, the adoption of UPI continues to rise. Last month, UPI transactions grew 4.4% to a record 18.68 Bn from 17.89 Bn in April. The value of these transactions also surged 5% to INR 25.14 Lakh Cr in May from INR 23.95 Lakh Cr in the preceding month.