UPI Just Got Quicker With NPCI’s New Guidelines Now in Force

The National Payments Corporation of India (NPCI) implemented new directives on Monday to reduce the response time for processing UPI payments.

The guidelines mandate that remitter banks, beneficiary banks and payer and payee payment‑service providers (PSPs) decrease the response time for UPI APIs triggered by the NPCI to as low as 10 seconds for certain transactions.

As a result, consumers can expect faster UPI transactions, especially for merchant purchases.

Transaction Time Reduced

A merchant’s bank account receiving UPI payments from a customer communicates with the customer’s bank via a server to perform tasks such as validating the transaction, checking its status and reversing unsuccessful transactions. The UPI APIs facilitate this communication between the two banks.

However, the UPI API, which acts as a communication bridge between the merchant’s bank terminal and the customer’s UPI‑enabled bank account, typically takes 15–30 seconds to respond to a request.

The NPCI has recently adjusted the response time for UPI API requests, reducing it to 10–15 seconds. This represents a potential 66 % reduction in time, calculated from a maximum of 30 seconds to a minimum of 10 seconds.

NPCI Circular

In a circular dated 26 April 2025, the NPCI stated that the adjustments to UPI API response times aim to enhance the customer experience. “Members must ensure that they make the appropriate changes to their system so that answers are handled within the amended timeframe. If the members have any dependency/configuration changes at the partner/merchant’s end, these must be addressed accordingly,” the circular noted.

The NPCI also urged banks and PSPs to ensure that these response‑time changes do not adversely affect technical decline thresholds.

In context, a decline threshold refers to the maximum acceptable percentage of transactions that may fail due to technical issues at the bank or NPCI level.

This follows the NPCI’s announcement last month of new guidelines imposing a 50‑time limit on daily account‑balance checks to streamline operations and reduce strain on the UPI system.

The development also follows a report suggesting the Centre was considering imposing a merchant discount rate (MDR) on digital payments exceeding ₹ 3,000. However, the Finance Ministry promptly dismissed the report as “speculative, baseless and misleading.”