Digital payments: How to resolve failed UPI payments, mitigate risks and ensure smooth transactions

Unified Payments Interface (UPI) has revolutionised how we conduct transactions today. It has made payments seamless, fast, and hassle-free. However, at times, the transactions fail for various reasons. Here are a few suggestions for resolving failed UPI payments and ensuring smooth transactions. Before that, let us understand the UPI transaction process. 

How UPI transactions work: UPI transactions operate on an event-driven mechanism, where disruptions in the form of failed events can lead to transactional setbacks. Lalit Mehta, Co-Founder and CEO of Decimal Technologies, said, “The process begins with initiating a transaction, causing it to join a queue of events awaiting processing. However, instances arise where the transaction becomes entangled due to various factors. To counteract this, a backend-driven re-initiation process is triggered to release the transaction from its stalled state. Yet, a concern arises when users independently endeavour to reinitiate transactions, potentially leading to duplications. To tackle this, a proactive strategy is recommended. By configuring a predetermined time window, such as 10 or 15 minutes, repeated transaction attempts within this span can be automatically flagged as duplicates. This safeguard prevents unnecessary repetitions, streamlining the payment process.” 

An all-encompassing approach is crucial, encompassing real-time transaction status checks, error code interpretation, retry mechanisms, intelligent customer support integration, and user-friendly interfaces. By adhering to these guidelines, the platform resolves UPI payment impediments and ensures a frictionless transaction experience, bolstering user confidence and overall satisfaction. 

Amit Kumar, CTO at Easebuzz, said, “To achieve this delicate balance, companies can integrate APIs (Application Programming Interfaces) with reputable payment aggregators and can significantly enhance transaction efficiency. APIs allow real-time data synchronisation, enabling businesses to cross-reference past transactions before initiating new ones. This step prevents accidental duplications, reducing the likelihood of funds becoming trapped due to repeated or conflicting requests. Secondly, implementing advanced refund API as part of UPI will help resolve customer complaints/queries swiftly and seamlessly. Employing advanced machine learning algorithms can help differentiate between genuine transactions and fraudulent activities.” 

Reasons behind failed UPI transactions: However, as a consumer, you must first identify the reason behind the failed transaction. Common reasons can range from connectivity issues to incorrect details entered, server-side errors, or even a simple lack of funds in the account. It's crucial to know why the transaction failed so that rectification measures can be taken accordingly. 

While inputting details like UPI ID or amount, incorrect entries can lead to transaction failures. Make sure the details entered are accurate. It is always a good practice to double-check. 

Sometimes, server-side errors can also cause transactions to fail. This can happen when the bank's server is down, or the UPI app faces technical glitches (as mentioned above). In such cases, waiting for a while and trying again usually works. However, if the issue persists, you may need to contact your bank or the UPI service provider. 

The solution is straightforward if a transaction fails due to insufficient balance. You need to ensure enough funds in your account before initiating the transaction. 

If your transaction fails, most UPI applications automatically attempt to refund the money to your account. If the refund doesn't occur with immediate effect, it usually takes 3 to 5 business days. 

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How to ensure a smooth transaction: We have learned about the common reasons behind UPI payment failures. Look at these six practical strategies to surmount these challenges, ensuring the smooth completion of transactions. 

Amit Gupta, Managing Director at SAG Infotech, said, “A myriad of factors can contribute to UPI transaction failures, including errors in UPI IDs, inaccuracies in recipient details, server downtimes, and connectivity hitches. Despite the efficiency of digital transactions, occasional setbacks are not uncommon.” 

1. Monitor daily UPI payment quota:  Both financial institutions and payment gateways impose daily limits on UPI transactions. If you encounter a stalled payment, it might be due to reaching your daily limit. Waiting for 24 hours for the limit to reset or considering alternative bank accounts can be helpful. 

2. Link multiple bank accounts:  Dependency on bank servers can contribute to UPI transaction failures. Linking multiple bank accounts to your UPI ID provides a backup option if one bank's server faces issues, ensuring uninterrupted transactions. 

Kaushik said, “When making digital payments, it is critical to maintain the confidentiality of sensitive financial information to avoid potential fraud. At the outset, opt for reliable and secure payment methods such as two-factor authentication (2FA) as an additional layer of security.” 

3. Verify receiver information:  Precision is crucial for UPI transactions. Double-checking the recipient's bank account number and IFSC code before initiating a payment prevents errors that could lead to transaction failures. Kaushik said, “Vigilance regarding URLs is essential, as they may be manipulated to imitate reputable websites. Similarly, reviewing QR codes and avoiding public WiFi or computers for digital transactions are advised.” 

4. Enter UPI PIN accurately:  Managing passwords and PINs can be challenging. If you forget your UPI PIN, a solution is available through the ‘Forget UPI PIN’ option. For added security, consider securely storing your PIN in a private location. 

“Change and strengthen your passwords across all accounts regularly, using a combination of letters, numbers, and symbols while avoiding easily guessed information, such as birth dates or names,” said Kaushik. 

5. Evaluate internet connection: Successful UPI transactions rely on stable network connectivity. Poor or unstable internet connections can result in payment failures or delays. If connectivity issues arise, relocating to an area with better signal strength or requesting the sender to establish a hotspot can help restore a stable connection. 

6. Utilise UPI Lite for low-value transactions: Addressing challenges posed by sluggish bank servers and network problems, the NPCI introduced UPI Lite. "The UPI lite is designed for low-value transactions. This service allows instant payments of up to Rs 200 without requiring a UPI PIN or relying on bank servers. It provides an alternative option for seamless payments,” said Gupta. 

How to minimise digital payment risk: You must always update your UPI apps to ensure smooth UPI experiences and minimise the chances of failure. App developers continuously refine and update their apps to keep them free from bugs and to enhance the user experience. 

Sanjay Kaushik, Managing Partner, Netrika Consulting Pvt Ltd., said, "You must always be cautious about sharing personal or banking data by email or text, with phishing attacks on the rise, making it vital to always confirm the sender & identity before responding. Another important measure is to keep your devices and software up to date since security patches that are part of these updates prevent many vulnerabilities. By implementing these steps, you can significantly minimise the risks associated with digital payments." 

Failed UPI transactions can be frustrating, but you can efficiently resolve the issues with the right know-how. By following these measures, you can ensure a smoother user experience, making digital transactions more reliable and convenient.