The rollout of the Unified Payments Interface (UPI) marks a major milestone in India’s digital payment ecosystem. Since coming to market in 2016, the uptake for adopting the real-time payment platform has been significant, with the interface a key part of day-to-day banking. In April 2025 alone, it facilitated around 17.89 billion transactions, highlighting growing popularity. However, on April 12, the interface experienced five -hours of downtime, triggered by banks flooding the system with excessive transaction status check requests.
In a digital first economy where UPI payments are a central component, such an outage impacted businesses of all sizes, from major retailers to street vendors. Significant downtime like this can lead to massive revenue losses, and the incident underscored the crucial need for intelligent observability. Beyond business disruption, such outages create operational friction within banking systems and pose potential risks to the essential nature of financial infrastructure. Intelligent observability could have played a part in anticipating such issues, ensuring system stability, and avoiding downtime and losses.
What went wrong?
On the day of the outage, Downdetector reported over 2,000 user complaints regarding UPI services, primarily related to failed payments and fund transfers. The National Payments Corporation of India (NPCI), the developer and manager of the UPI system, later pinpointed the issue as the absence of a transaction status check limiter, with some PSP banks repeatedly sending "check transaction" requests for older transactions.
Real-time monitoring of API call rates and system load could have detected anomalies like excessive transaction status checks. Also, real-time dashboards and alerts may have flagged the spike in API requests early, enabling proactive throttling or rerouting to prevent system overload. Given UPI’s highly interconnected nature, with stakeholders including NPCI, banks, and third-party apps like Google Pay and PhonePe, each component must function seamlessly for transactions to succeed. When each component is so tightly linked, a weakness in one area can ripple across an entire network.
Siloed monitoring, where each stakeholder - whether NPCI, banks, or apps - reviews only its own systems, can undermine proactive incident detection. During the April 12 outage, some banks disregarded NPCI’s API call limit guidelines, and the corporation lacked centralized oversight to spot the problem before it escalated. Real-time monitoring across the entire ecosystem is critical to detecting anomalies like the API request surge and maintaining uninterrupted service.
What role would strategic observability have played?
For a system like this that’s widely used across India, it can be difficult to prioritize and identify issues that require immediate attention. However, cutting through noise and focusing on critical issues is essential for improving customer experience and satisfaction, which is where observability plays a crucial role.
In this UPI scenario, an observability platform could have helped to avoid the downtime and alerted teams to the issue before it escalated, saving time and money. Such technology can eliminate blind spots by providing a 360-degree view of the entire ecosystem, centralizing data to identify and fix issues proactively before they impact customers. The platform accelerates root cause analysis and uses machine learning to detect patterns, forecast metrics, and identify anomalies in real-time. Without these capabilities, Site Reliability Engineers and developers can struggle to access the right data and resolve issues before they snowball into big problems.
Also, observability tools with agentic AI support seamless compatibility with existing workflow tools. Intelligent agentic orchestration can streamline incident prediction, resolution, and troubleshooting. Moreover, observability can provide the most relevant recommendations and resolutions to increase system uptime. Additionally, as agentic, AI-driven observability is connected via natural language APIs, it becomes easier to identify issues using plain language, catalyzing issue detection and resolution in minutes.
By integrating observability into the system, the reliability and efficiency of UPI can be consistently maintained. Most importantly, it minimizes downtime and ensures a seamless, best of breed experience for millions of users across India.
Also Read: SEBI Introduces New Tool to Authenticate UPI Addresses for Payments
Preventing the next outage
It’s clear that adopting an intelligent observability platform is the answer to issues associated with the UPI outage. In a digital environment where downtime can lead to immediate financial losses and user dissatisfaction, observability empowers teams to stay ahead of potential disruptions. It enables real-time insights into system behavior, helping maintain stability across platforms that serve everything from small businesses to millions of consumers.
Outages of this nature aren’t one-off events — they can impact any digital service at any time. What sets resilient systems apart is comprehensive visibility across the entire technology stack. With the ability to detect anomalies early and respond quickly, organizations can prevent small issues from escalating, protect customer trust, and deliver the seamless digital experiences users have come to expect.
About the Author
Ved brings over 15 years of experience building highly-scalable platforms and products across CPaaS, eCommerce, gaming, and enterprise sectors. Currently serving as Senior VP Engineering and Managing Director at New Relic India, he drives engineering excellence and strategic initiatives. Previously, as VP Engineering at Myntra-Jabong—India's largest fashion destination—Ved defined and delivered comprehensive engineering roadmaps spanning consumer-facing applications, mobile/web-PWA platforms, search and discovery systems, personalization engines, user communications, complete buying and checkout experiences including payments infrastructure, fraud detection and prevention systems, API gateways, pricing and revenue optimization products, plus customer engagement and growth hacking solutions.
