Online payments through UPI are set to become faster now, as the National Payments Corporation of India (NPCI) has issued a new update. From June 16, 2025, onwards, the update will reduce the Application Programming Interface (API) response time to half.
With NPCI cutting the UPI API response time, customers and merchants can look forward to their transactions taking up less time than previously.
This enhancement pertained particularly to merchant outlet payments using UPI apps such as Google Pay, PhonePe, Paytm, BHIM, Amazon Pay, and more.
What is an API?
An Application Programming Interface, or API, is similar to a messenger that enables two distinct systems to communicate with each other. APIs, in UPI payments, assist in linking your bank to the merchant's bank, sending messages regarding the payment—whether approved, pending, failed, or requires reversal. Each time you scan a QR code and make a payment, APIs are working in the background facilitating such communication.
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Why the Update Was Necessary
Until recently, UPI APIs would take 15 to 30 seconds to process a transaction. Most often, this lag resulted in a sluggish experience, particularly during high volumes of usage or when paying at crowded retail locations. NPCI's recent update reduces that response time to a span of 10 to 15 seconds. This is a cut of a maximum of 66 per cent from the cap of 30 seconds, equating to much quicker payment.
Improved Consumer Experience
When a customer makes a UPI payment by scanning a QR code, the bank of the customer sends a request to the UPI server inquiring if the payment is acceptable. The server requests a reply from the recipient bank. If it is acceptable, the money transfers immediately. If not, it is reversed. This whole to-and-fro between the two banks will now be much faster with quicker API responses.
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So, rather than having to wait for a payment to be confirmed or reversed, users will experience results earlier—this comes in handy particularly when waiting in lines or making several payments in a compact time frame.
Beyond Speed
NPCI stated the action would enhance the overall user experience without placing technical systems under additional pressure. In a circular to its member banks and service providers, NPCI requested them to modify their systems in accordance with the new response times. It also encouraged them to keep the update from resulting in a rise in failed transactions, referred to as "technical declines."
This indicates that although speed is crucial, accuracy and reliability are just as crucial for successful digital payments.
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What It Means for Merchants and Platforms
For merchants, particularly small businesses that heavily depend on UPI for everyday sales, this update may be very beneficial. Quicker confirmations translate to faster checkouts and less customer irritation about delayed payment.
For UPI apps and platforms, the enhancement could also lower traffic congestion during peak hours such as festivals, weekends, and sales, when payment infrastructure is typically strained.
Quicker Refunds Too
Another benefit is faster refunds in case of a failed transaction. Currently, making a payment come to a halt or fail halfway through, the money is typically reversed with a brief delay. With faster API response times, these reversals will also occur instantly, providing reassurance to the consumer.
