Home / News / India /  SBI, Axis, HDFC lead the pack in UPI transactions in November: NPCI

State Bank of India (SBI), Axis Bank Ltd, HDFC Bank Ltd. and Paytm Payments Bank Ltd. (PPBL) have led the pack in November among the top remitter banks, initiating close to half or 1.1 billion of the total Unified Payments Interface (UPI) transactions processed in November, according to latest data released by National Payments Corporation of India (NPCI).

Among the remitter banks, which hold the bank account of the sender of UPI transactions, SBI closed almost 608 million UPI transactions in November and saw the maximum technical decline rate of 3.12%, with overall approval rate of 90.52%. While PPBL saw the lowest technical decline rates among the top banks at 0.08%.

A technical decline rate is a parameter for transactions declined due to reasons, such as unavailability of systems and network outages on bank or NPCI servers.

NPCI is the operator of the UPI infrastructure in the country.

Approval rates of banks are also affected by high business decline rates on their network, which is caused due to customers entering an invalid pin, inputting wrong details of beneficiary accounts, and is not the fault of a bank server. Further, a remitter is a person who sends the money into the beneficiaries account.

For SBI, the business decline rate stood at 6.35% on the remitter side.

“SBI has been really slow in improving its infrastructure, with high payment volumes still run on its core banking infrastructure. Core banking systems were not made for the digital payment volumes. Hence this has always been a challenge, and major outages in the industry are expected as payment volumes rise," said a payment executive in the UPI space, who spoke to Mint on condition of anonymity.

Corporation Bank saw the highest technical decline rates in the industry standing at 13.53%.

HDFC Bank, which received a big blow from RBI earlier this month, with a temporary cap put on its digital launches and new credit card issuances, saw approval rates of 93.46% on the remittance side of the business. While for receiving UPI transactions, the approval rate of the bank network hovered around 96.69%.

Technical decline rate for HDFC Bank, due to outages stood at 1.85% on the remittance side and 0.92% on the beneficiary side.

HDFC is the third largest UPI-player amongst banks in terms of remittances, clocking close to 179.4 million transactions in November. HDFC Bank currently is UPI partner for Google Pay which currently powers almost 43.4% of total UPI transactions in the country, as per November data.

Over the past few months, both SBI as well as HDFC have been facing outages on their internet banking and digital payments side of the business. Recently, HDFC saw outages in the bank’s internet banking and payment system on 21 November due to a power failure in the primary data centre, causing the regulator to take a harsh stance on suspending parts of its business operations.

“Today, there is no incentive for banks to pay attention to their digital payment infrastructure, since the merchant discount rate (MDR) on UPI continues to be zero; and no business model in sight. With these outages there will be a time when MDR will matter, when the regulator realises that no investments are being made," said the above quoted person.

Following through the same evening, even state-owned SBI said that its YONO mobile app was down due to a system outage. Both banks were also facing outages in the month of September.

“The only people investing in the UPI infrastructure are deep pocketed players like Paytm and PhonePe. Small players find it challenging to raise money in UPI-payments, due to lack of business model, and banks don’t have a motivation to invest in infrastructure, as merchant discount rates (MDR) continue to be zero. With the baseline of digital payments doubling, it was a massive challenge for tech teams to deploy infrastructure involving servers and data centers, right in the middle of the pandemic," Sameer Nigam, founder and CEO, PhonePe said in a recent interview.

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