PhonePe’s system crash triggers payment failures; NPCI clears air on UPI stability

PhonePe admitted that a technical glitch in its systems caused widespread transaction failures, forcing the company to reroute traffic and apologize to users as complaints flooded social media and outage trackers.

The disruption, which peaked around 6:45 p.m. Monday, led to speculation of a broader UPI system failure. However, the National Payments Corporation of India (NPCI) clarified that the UPI network was operating normally, with the issue isolated to PhonePe’s infrastructure.

PhonePe co-founder Rahul Chari explained that all of the company’s services were temporarily migrated to a new data center, which buckled under peak-hour demand.

"This evening, 100 percent of our traffic across all our services was being served through a new data centre," Chari said. "Unfortunately, the Monday evening peak traffic exposed a network capacity shortfall due to which transactions started failing."

Chari confirmed that PhonePe has since rebalanced traffic across other data centers, and services are now recovering. The company has also launched additional disaster recovery (DR) drills and strengthened its network firewall as part of immediate corrective measures.

"We assure to take these learnings and further strengthen our systems," he added.

Outage tracking platform Down Detector recorded a spike in user reports starting at 6 p.m., intensifying confusion among users who mistook the PhonePe glitch for a UPI-wide crash.