PhonePe app users report payment issues: Here's what the company co-founder has to say

PhonePe, the largest player in the UPI ecosystem, has said that the app suffered a technical disruption on Monday (May 12), resulting in widespread inconvenience for users across the country attempting digital financial transactions. According to a post by Rahul Chari on X (formerly Twitter), co-founder of PhonePe, there was a "network capacity shortfall due to which transactions started failing."

Hundreds of users reported on social media their inability to make payments and execute fund transfers via the platform during the outage. However, it now seems that services have been restored as some users say their apps were working normaly.

Given the escalation of the conflict last week, at PhonePe we initiated active DR drills, with heightened cybersecurity measures on our network firewall. This evening, 100% of our traffic across all our services was being served through a new data center. Unfortunately, the Monday evening peak traffic exposed a network capacity shortfall due to which transactions started failing. We have now rebalanced our traffic across our other sites and are seeing the recovery. Our apologies for this. We assure to take these learnings and further strengthen our systems.

Given the escalation of the conflict last week, at PhonePe we initiated active DR drills, with heightened cybersecurity measures on our network firewall. This evening, 100% of our traffic across all our services was being served through a new data center. Unfortunately, the…

— Rahul Chari (@rahulchari9) May 12, 2025

According to service disruption tracking website Downdetector, the incident led to a peak of approximately 1,000 user complaints specifically concerning services, with reports predominantly related to failed payment transactions and fund transfers attempted by individuals.

Banks, payments apps hit
As per Downdetector, the effects of this service disruption were felt across a broad spectrum of digital payment platforms, including PhonePe and Paytm, however, Paytm CEO Vijay Shekhar Sharma said that the app was working fine.

Just so you know, our UPI payments are working smoothly.
Paytm app is up and running.
#PaytmKaro

Just so you know, our UPI payments are working smoothly.
Paytm app is up and running.#PaytmKaro

— Vijay Shekhar Sharma (@vijayshekhar) May 12, 2025

Some users also complained that mobile banking apps, including major players such as the State Bank of India (SBI), HDFC Bank, Axis Bank, and several other banking platforms, were also affected.

Notably, members of the TOI Tech team found that attempts to make digital payments and transfer funds using UPI were successful.

Users share experience on social media
Social media, especially X, is flooded with memes and posts on the outage. Some users have also started to update that the apps are now running normally.

Are you too facing UPI failure?
Been stuck here since past hour. Its failing across all platforms

Are you too facing UPI failure?
Been stuck here since past hour. Its failing across all platforms pic.twitter.com/HWQp1tIY6t

— IndiaMetSky Weather (@indiametsky) May 12, 2025

Is UPI down?
I'm in the market and unable to make any payments.
#UPIDown

Is UPI down?

I'm in the market and unable to make any payments.#UPIDown

— Amit Jha (@Amit_definite) May 12, 2025

It's working now.

— Amit Jha (@Amit_definite) May 12, 2025

UPI services are down across major platforms like GPay, PhonePe, and Paytm. In a country moving rapidly towards digital payments, such frequent outages raise serious concerns.
#UPIDown #GPay #PhonePe
Pune #LaCasaDeLosFamososCol

UPI services are down across major platforms like GPay, PhonePe, and Paytm. In a country moving rapidly towards digital payments, such frequent outages raise serious concerns.#UPIDown #GPay #PhonePe
Pune #LaCasaDeLosFamososCol pic.twitter.com/btdduJ0qOt

— ✨Kavya Singh (@singhkavya55) May 12, 2025