KKN Gurugram Desk | The National Payments Corporation of India (NPCI) has issued a new circular, announcing changes to the UPI (Unified Payments Interface) system that will take effect from August 1, 2025. These changes aim to ensure smoother operation of the UPI network and minimize the risk of system overloads during peak hours. The new rules will also affect the way certain UPI requests are handled, particularly balance inquiry requests, which will be limited during high-traffic periods.

As UPI continues to be a crucial payment infrastructure in India, it is essential to understand these new guidelines and how they will impact the users, especially when it comes to accessing UPI services during peak times.

NPCI’s New Circular on UPI API Limitations

According to the latest circular issued by NPCI, banks and payment service providers (PSPs) are required to limit the usage of certain APIs (Application Programming Interfaces) on the UPI network. These APIs are critical for various UPI services, including balance inquiries, auto-pay mandates, and transaction status checks.

The main reason behind these limitations is to reduce pressure on the UPI network, which has been experiencing significant congestion during peak hours. By implementing these changes, the NPCI aims to ensure that the UPI ecosystem functions smoothly, without system failures or crashes, especially during high-demand periods.

Why the Changes? Understanding the Need for New UPI Guidelines

The new UPI rules come after several UPI outages that occurred in March 2025, which raised concerns about the system’s ability to handle peak-hour traffic. These outages impacted users’ ability to make payments or check balance information, causing inconvenience to millions of users across the country. In response to these incidents, NPCI has decided to implement stricter guidelines to prevent future system failures and improve the overall efficiency of UPI services.

The guidelines specifically focus on limiting the number of requests that can be made to certain APIs, including:

• Balance Inquiry: Users will not be able to perform unlimited balance checks, especially during peak hours.

• Auto-pay Mandates: New rules will govern the authorization and handling of automatic payments through UPI.

• Transaction Status Check: Frequent transaction status requests will be limited to avoid overloading the network.

These changes are meant to balance demand and ensure that the UPI network remains stable and accessible to all users during peak usage times.

Key Changes in UPI: What Users Need to Know

1. Limiting Balance Inquiries: Starting from August 1, 2025, UPI apps will have the ability to limit the number of balance inquiry requests users can make during peak hours. This is being done to reduce the strain on the network and ensure that other critical UPI services are not interrupted.

2. Auto-Pay Mandates: The NPCI has issued new guidelines for handling auto-pay mandates. These mandates, which allow users to set up recurring payments through UPI, will now be subject to stricter monitoring. This is likely to impact users who frequently use UPI for subscription services or bill payments.

3. Transaction Status Checks: The new rules will limit the number of requests users can make to check the status of their transactions. This measure is aimed at reducing unnecessary traffic on the UPI network and improving the speed of transaction processing.

4. API Limits for Banks and PSPs: Banks and PSPs will be required to implement these changes to their UPI systems and ensure that their platforms adhere to the new guidelines. These measures are crucial to ensuring the long-term stability of the UPI network.

Impact of UPI Rule Changes on Users and the Financial Ecosystem

These new UPI rules are likely to affect millions of users across India. Here’s how the changes might impact different segments of the user base:

• Casual Users: For everyday users who check their balance or make a few payments per month, these changes might not have a significant impact. However, they may experience occasional delays during peak usage times, particularly when checking their balance or checking transaction status.

• Frequent UPI Users: For users who make frequent balance inquiries or use auto-pay mandates, the new rules could lead to some inconvenience. Limiting balance checks during peak hours may cause delays or prevent users from checking their balance in real-time.

• Businesses and PSPs: Payment service providers and businesses that rely heavily on UPI for transaction processing, especially during peak times, will need to adjust their systems to accommodate these new rules. Companies may need to find alternative ways to handle payment requests or balance inquiries during high-demand periods.

• Consumers Using Auto-Pay: Those who depend on auto-pay services for recurring payments (such as subscriptions, utility bills, and insurance premiums) may experience changes in how these payments are processed. With stricter guidelines in place for auto-pay mandates, there may be delays or additional authentication requirements.

How These Changes Will Affect UPI Users

The new changes aim to improve the overall efficiency and reliability of UPI, ensuring that the system can handle millions of transactions without disruptions. However, some users may experience delays or limitations when trying to access certain services, such as checking their balance or confirming transaction statuses.

These changes are expected to:

1. Reduce Load on UPI Servers: By limiting the number of requests for non-essential services (like balance checks), the UPI network will have more capacity to process critical transactions, thus reducing the chances of system outages.

2. Encourage Responsible Use of UPI: Users will need to be more mindful of the frequency of balance checks and other requests during peak hours, potentially improving the overall experience for everyone.

3. Increase System Stability: By managing traffic more effectively, these changes will help ensure that the UPI system remains stable during high-demand periods, such as during festivals, sales events, or government benefit disbursements.

What’s Next for UPI Users?

1. Adapting to New Guidelines: Users will need to adapt to the new limitations on balance inquiries and transaction status checks. If you are a frequent user of UPI, especially for checking your balance, it may be wise to plan ahead and make sure you have access to alternative methods, such as checking your balance directly with your bank.

2. Exploring Alternative Payment Methods: In case of delays or limitations on UPI services, users may need to explore alternative payment methods like Net Banking, UPI Lite, or even wallet apps that can help with payments and balance checks.

3. Stay Informed About Updates: Keep an eye out for further updates from NPCI regarding any additional changes to the UPI system. The NPCI will likely release additional guidelines or FAQs to help users understand the new rules better.

The introduction of these new UPI rules by the National Payments Corporation of India (NPCI) marks a significant step towards improving the efficiency and reliability of India’s digital payment infrastructure. While these changes may cause temporary inconvenience for some users, they are crucial for ensuring the long-term stability of the UPI network.

As digital payments continue to grow, it is important that the UPI system evolves to meet the demands of millions of users while maintaining high levels of security and performance. The changes outlined in NPCI’s circular are a positive step in this direction, and users are encouraged to stay informed and adapt to these guidelines when they take effect on August 1, 2025.