Banks that currently take more than 24 hours to unblock funds stuck due to failed UPI transactions will be able to do so in less than 30 seconds, one of them said.
“The NPCI is working on a system that will allow banks to know if the money debited has been credited to the receiver or not; all this can be done in less than 30 seconds and the money can be reversed,” said the person, who is directly involved in the discussions.
The NPCI did not respond to an email seeking comment.
State Bank of India, the largest remitter bank on the UPI platform, had a debit reversal success rate of 84.61% in June, compared with 98.92% for
, the second largest remitter network on the platform.
processed more than 1.62 billion UPI transactions, compared with nearly 530 million by HDFC Bank.
“Up until now, the approach to handle failed transactions is to wait for the account statement from the counterparty bank, which is a 24-hour process,” said Dipak Gupta, joint managing director,
. “If it’s proven that you are wrongly debited, then the blocked funds will be released to your account.”
There are two kinds of failures on UPI payments – technical decline and business decline. While technical decline is caused due to issues with bank or NPCI systems, business declines are caused due to reasons pertaining to customers such as incorrect passcode entry or transactions beyond stipulated limits.
In terms of technical decline, SBI saw TD rates of 5.06% versus 0.08% of HDFC Bank. The business decline of SBI was 6.96%, while for HDFC Bank it was at 5.48%.
A typical peer-to-peer UPI transaction involves the exchange of real-time information between the servers of the remitter bank and sponsor bank on the UPI network, the NPCI’s server, and the beneficiary account. For merchant transactions, the flow becomes even more complex with an additional settlement layer.
In July, the UPI reported its highest ever monthly transactions since its inception in 2016 – more than 6.28 billion transactions worth ₹10.62 lakh crore, according to data from the NPCI.
Over June, transactions were up 7.16% by volume and 4.76% in value. Over July last year, the volume of transactions nearly doubled, while value rose 75%.