On April 12, 2025, the Unified Payments Interface (UPI), India’s real-time payments system, experienced its fourth outage in over two weeks. Transaction failures were ascribed to “intermittent technical issues” by the National Payments Corporation of India (NPCI).
According to NPCI data, UPI was unavailable for a total of 282 minutes during two partial and sporadic occurrences. These included one that lasted 187 minutes in January 2022 and another that lasted 95 minutes in March 2025.
The process of increasing its dispersion among smaller enterprises and diminishing the market share of major players was the reason given by the industry for this.
One goal is to have a balanced market share. In that regard, it is a challenging assignment. In a previous interview with Business Standard, Dilip Asbe, managing director and CEO of NPCI, stated, “We hope new players can invest back, gain market share, and grow the market, and, more importantly, bring out different use cases.”
In January 2020, the merchant discount rate (MDR) was set to zero for RuPay debit card and UPI transactions, in contrast to debit and credit card transactions. This was accomplished by amending Section 269SU of the Income-Tax Act of 1961 and Section 10A of the Payments and Settlement Systems Act of 2007.
The price that merchants pay banks or fintech businesses to process payments in order to complete a transaction is known as the MDR.
“The Payments and Settlement Systems Act must be revised once more if any significant fees are to be introduced to peer-to-merchant (P2M) transactions in particular, since it was amended to make UPI free for all transactions. The Ministry of Finance and the Prime Minister’s Office (PMO) will need to step in on this,” according to someone familiar with the MDR talks.
In a letter to Prime Minister Narendra Modi last month, the Payments Council of India (PCI), which represents India’s digital payment companies, requested a 0.30 percent MDR rule on UPI transactions at major retailers.
Nearly 90% of India’s 60 million UPI-accepting shops will not be impacted if the plan is approved because they are classified as small businesses. Businesses with an annual revenue of less than ~20 lakh are considered small merchants.
Only roughly five million people who make more than ~20 lakh and are classified as significant merchants by the payments authority will have to pay a little fee to handle transactions on the UPI.