PhonePe CTO Blames Data Centre Shift For UPI Crash, Claims Fix In Place: All You Need To Know
The disruption marked the third major UPI outage in less than a month, raising concerns about the stability of one of the world’s largest real-time payment systems.
UPDATE (May 13, 8:50 am): PhonePe CTO Offers Clarification
Following the incident, PhonePe co-founder and CTO Rahul Chari issued a clarification on X (formerly Twitter), stating that the company had initiated active disaster recovery drills last week amid escalating geopolitical tensions. As part of these drills, 100% of PhonePe’s traffic had been shifted to a new data centre, accompanied by enhanced cybersecurity measures.
However, Monday evening’s peak traffic exposed a network capacity shortfall at the new data centre, which led to transaction failures. Chari said the team has since rebalanced traffic across other sites, and services have recovered. “Our apologies for this. We assure to take these learnings and further strengthen our systems,” he added.
Given the escalation of the conflict last week, at PhonePe we initiated active DR drills, with heightened cybersecurity measures on our network firewall. This evening, 100% of our traffic across all our services was being served through a new data center. Unfortunately, the…
— Rahul Chari (@rahulchari9) May 12, 2025
For now, it seems PhonePe users were the most affected.
However, outage tracker Downdetector showed a huge spike in user reports on UPI transactions last night.
Paytm issued a clarification last night that its systems were working fine.
Everything’s working. pic.twitter.com/KwyjPe4gkP
— Paytm (@Paytm) May 12, 2025
ORIGINAL REPORT FOLLOWS BELOW:
Unified Payments Interface (UPI), faced a major nationwide disruption on Monday evening, leaving millions unable to complete transactions on platforms like Google Pay, PhonePe, and Paytm. The outage caused widespread inconvenience to users and merchants alike, sparking frustration and triggering a flood of complaints online.
Transaction Failures Rattle Users and Merchants
Payment failures were reported across leading UPI apps, with users encountering repeated error messages and failed payment attempts. On Paytm, for instance, many users saw a pop-up message stating, “UPI app is facing some issues.” The disruption marked the third major UPI outage in less than a month, raising concerns about the stability of one of the world’s largest real-time payment systems.
Social media platforms were soon abuzz with user reports flagging payment issues, while Downdetector — a website that tracks outages — saw a surge in problem reports linked to UPI services, indicating the extent of the technical snag.
Surge in UPI Usage Highlights the Stakes
The outage comes at a time when UPI usage in India is hitting record highs. In March, UPI clocked 18.30 billion transactions, bouncing back from February’s 16.11 billion — a 5 per cent dip. The value of these transactions rose sharply too, with March recording a total of Rs 24.77 lakh crore, up 12.8 per cent from Rs 21.96 lakh crore in February.
Given UPI’s deep integration into everyday payments — from groceries to cab fares — any breakdown in the system is felt instantly by millions. With increasing dependence on digital payments, such outages pose a serious challenge to consumer trust and financial reliability.
PhonePe and Google Pay Dominate Despite Glitches
Despite the hiccups, leading platforms continue to dominate the UPI ecosystem. PhonePe, which is reportedly prepping for its IPO, processed 864.7 crore transactions in March alone, accounting for 47.25 per cent of all UPI transactions. Google Pay held the second-largest share, contributing 36.04 per cent of total transaction volume and 34.98 per cent of the transaction value.
Meanwhile, the government is pushing forward with its digital payments agenda. In a recent move aimed at empowering small businesses and encouraging micro-transactions, it approved a Rs 1,500 crore incentive scheme for promoting low-value transactions via the BHIM-UPI platform.
As India charges ahead on the path of digital finance, the recurring UPI outages raise a red flag. Ensuring the reliability and resilience of such a critical payment infrastructure is now more urgent than ever.
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