Starting August 1, India’s most-used payment platform — Unified Payments Interface (UPI) — will undergo a significant backend overhaul as the National Payments Corporation of India (NPCI) enforces new restrictions on how frequently banks and apps can access key UPI functions.
With over 18 billion transactions processed in May 2025 alone, UPI has become India’s digital payments backbone. But the rapid scale-up has exposed fragilities. A five-hour outage on April 12, the longest in years, triggered NPCI’s decision to regulate how UPI’s backend systems — specifically its Application Programming Interfaces (APIs) — are being used by payment apps and banks.
In a directive issued to all Payment Service Providers (PSPs), NPCI outlined new usage caps on 10 critical APIs, including those responsible for balance checks, transaction confirmations, and autopay mandate execution.
🔧 Key Changes Effective August 1:
- Balance Enquiries: Limited to 50 times per UPI app per day.
- Linked Account View: Capped at 25 queries per day per app.
- Autopay Mandates: Execution restricted to non-peak hours (before 10 AM, 1–5 PM, after 9:30 PM).
- Transaction Status Checks: Max 3 checks per transaction within two hours, spaced 90 seconds apart.
- Mandatory Balance in Notifications: Banks must now include real-time account balances in all transaction alerts.
📉 Why This Matters:
The April outages revealed that some banks were overloading UPI with excessive, often redundant API requests — particularly for transaction checks and balance enquiries. NPCI’s internal investigation found that banks were violating self-imposed limits, sometimes querying transaction statuses dozens of times per transaction.
With UPI handling up to 7,000 transactions per second, even a brief glitch can affect lakhs of users. Recent outages — four in just 18 days — made clear that system-wide traffic controls are overdue.
👥 Impact on Users:
While most users won’t feel the difference immediately, power users who frequently check balances or app-generated auto-checks might face daily limits. To ease this, banks will now push real-time balance updates after each transaction — reducing the need for manual checks.
Autopay mandates (used for EMIs, SIPs, and subscriptions) will still be created any time, but executions will occur only in designated low-traffic windows, possibly causing slight delays in processing.
⚠️ Compliance & Penalties:
NPCI has warned PSPs of strict consequences for non-compliance, including penalties, suspension from onboarding users, and restricted access to UPI APIs. All banks and PSPs must submit proof of compliance by August 31, confirming that their systems throttle high-volume requests and follow NPCI’s new rate-limiting rules.
This overhaul marks a crucial step in making India’s real-time payments infrastructure more resilient as it continues to expand. With over 40 crore users relying on UPI, the shift towards smarter backend regulation aims to ensure long-term stability and user trust.
