The National Payments Corporation of India (NPCI) has announced that several key changes to the Unified Payments Interface (UPI) ecosystem will come into effect from August 1, 2025. These updates introduce revised guidelines governing the use of Application Programming Interfaces (APIs) by banks and digital payment platforms, with a focus on features such as AutoPay, balance inquiries, and transaction status updates.

The objective behind these changes is to enhance the efficiency, stability, and reliability of UPI services, particularly during periods of high transaction volume. While routine transactions—such as payments at local shops or online purchases—will remain largely unaffected, the updates impose new restrictions on certain backend functionalities to optimize system performance.

Key Changes to be Implemented

1. Daily Cap on Balance Inquiries

Users will now be restricted to a maximum of 50 balance inquiries per day per UPI application. This measure aims to curb excessive API requests that can burden the network infrastructure, particularly during peak usage hours.

2. Limit on Linked Bank Account Information Requests

Requests to retrieve details of bank accounts linked to a mobile number will be limited to 25 times per day per UPI app. This is designed to streamline server operations and reduce unnecessary data traffic.

3. Time-Bound Processing of Auto-Debits

Recurring payments under UPI AutoPay—such as subscription charges (e.g., OTT platforms, mutual fund SIPs)—will now be processed only during designated off-peak time slots:

• Before 10:00 AM
• Between 1:00 PM and 5:00 PM
• After 9:30 PM

This scheduling is intended to alleviate load during high-traffic periods and ensure smoother transaction processing.

4. Limit on Payment Status Refresh Attempts

In cases where a transaction is pending, users will be allowed to check the transaction status only three times, with a mandatory 90-second interval between each attempt. This measure is designed to minimize server strain caused by repeated status requests.

Objective of the Changes

NPCI has clarified that these revisions are part of a broader effort to improve the resilience of the UPI network and minimize service disruptions, especially during peak usage periods such as festivals, month-ends, and sales events.

Implications for Banks and Fintech Companies

The upcoming UPI changes will require significant operational adjustments from banks, payment service providers (PSPs), and fintech companies. Compliance with the new API usage norms will necessitate both technical upgrades and process refinements. Below are the key implications:

1. API Rate Limiting and Compliance Monitoring

Banks and fintech platforms must implement robust API rate-limiting mechanisms to ensure adherence to the new daily caps on balance inquiries and linked account information requests. Failure to comply could result in service disruptions, regulatory scrutiny, or potential penalties.

2. Reconfiguration of AutoPay Processing Systems

Entities facilitating recurring payments will need to reschedule auto-debit processing to align with the designated low-traffic time windows. This may involve:

• Updating backend systems to support scheduled batch processing.
• Notifying merchants and users of possible changes in payment timing.
• Ensuring that sufficient funds are available during the specified windows to avoid transaction failures.

3. Transaction Monitoring and User Communication Enhancements

With new limits on payment status refresh attempts, companies must enhance their transaction monitoring systems to provide timely updates to users and reduce the need for manual status checks. This may involve:

• Improved real-time notifications.
• Clearer in-app messaging to manage user expectations and reduce repeat queries.

4. Infrastructure Optimization

The updates offer an opportunity for institutions to optimize server capacity and resource utilization by reducing redundant API calls. Efficient use of bandwidth and processing power during peak periods can lead to better system performance and lower operational costs.

5. Customer Support Preparedness

Banks and PSPs may experience an initial increase in user inquiries regarding these changes. Proactive customer education through notifications, FAQs, and helplines will be essential to ensure a smooth transition.

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