Leading fintech platform PhonePe experienced a temporary UPI transaction outage on Monday, following disaster recovery (DR) drills aimed at bolstering cybersecurity in light of the recent India–Pakistan conflict.
What Caused the Outage?
According to PhonePe CTO Rahul Chari, the company routed 100% of its transaction traffic through a newly activated data center as part of DR exercises designed to test its network firewall resilience. However, a spike in UPI transaction volume during peak hours exposed a network capacity shortfall, causing widespread transaction failures for over an hour.
“The Monday evening peak traffic exposed a network capacity shortfall due to which transactions started failing,” said Chari.
Outage Specific to PhonePe
Importantly, the disruption was limited to PhonePe’s platform, and the broader UPI network remained unaffected, according to industry sources. Rival payment apps, including Paytm, reported uninterrupted service. Paytm founder Vijay Shekhar Sharma took to X (formerly Twitter) to confirm that the app handled twice its normal UPI transaction volume without any issues.
Rising Concerns Around UPI Outages
This incident marks another in a series of UPI disruptions, with users facing at least four major outages in March and April 2025. In response, the National Payments Corporation of India (NPCI) recently issued two circulars to enhance system stability:
- One circular targets reducing response time across four critical APIs.
- The second aims to prevent API misuse in real-time payment processing.
Cybersecurity Amid Conflict
The escalating geopolitical situation prompted PhonePe’s proactive cybersecurity measures. The fintech giant’s decision to simulate full-scale disaster recovery conditions highlights how national security concerns are increasingly intertwined with digital infrastructure resilience.
As digital payments become the backbone of India’s economy, ensuring continuous uptime and robust cybersecurity is more critical than ever. PhonePe’s outage is a stark reminder of the challenges fintech companies face in maintaining seamless service under pressure.
