HDFC Bank reports lowest fail rate for UPI transactions

Mumbai: HDFC Bank has reported the lowest fail rate for Unified Payments Interface (UPI) transactions processed in May with a technical decline rate of just 0.06%, latest data published by the National Payments Corporation of India (NPCI) showed.

Leading banks on the UPI network such as State Bank of India, Axis , ICICI and Bank of Baroda reported technical decline (TD) rates of 1.08%, 0.08%, 0.11% and 0.24%, respectively. Others such as Paytm Payments Bank and Punjab National Bank reported TD of 0.11% and 1.47%, respectively, during the month.

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 (BD) are caused due to reasons pertaining to customers such as incorrect pin entry or transactions beyond stipulated limits. A typical peer-to-peer UPI transaction involves the exchange of real time information between the servers of remitter bank, sponsor bank on UPI network, the NPCI’s server, and the beneficiary account. For merchant transactions, the flow becomes even more complex with an additional settlement layer.


NPCI data showed that most banks were reporting BDs between 4% and 7% in May. Between September and January, most banks including HDFC Bank were reporting TDs above 1% on UPI owing to sudden increase in digital payment volumes. Almost all leading banks have significantly reduced their failure rates in the subsequent months of March, April and May.