In today’s digital first world PhonePe is India’s leading digital app for making payments and managing money platforms. Founded in December 2015 and launched in August 2016 by
In today’s digital first world PhonePe is India’s leading digital app for making payments and managing money platforms. Founded in December 2015 and launched in August 2016 by Sameer Nigam (CEO), Rahul Chari (CTO), and Burzin Engineer, having its headquarters at Bengaluru Karnataka. It operates under the proprietorship of PhonePe Private Limited, a subdivision that was originally part of Flipkart but now a separate entity with Walmart as a major investor. PhonePe company quickly made its position as a dominant one in India’s UPI (Unified Payments Interface) sector.
PhonePe faced a major disturbance in its UPI (Unified Payments Interface) services on May 12, 2025, at 7:30 pm leaving millions of users unable to complete transactions. The company’s Chief Technology Officer (CTO) later confirmed that the disruption was activated by issues arising from a recent shift to a new data centre. Nowadays digital payments become an important part of daily life in India, such disruptions raise major concerns. However, PhonePe has assured users that the problem has been identified and a fix is now in place. Here’s a detailed look at what happened, why it occurred, and what steps have been taken to restore services.
On 12th of May 2025, around 7:30 PM, PhonePe users across the country began reporting issues while trying to make UPI payments. Either transactions were failing or taking long time to process than usual. This disturbance sparked concern, especially given PhonePe’s large user base and the growing reliance on UPI for everyday payments.
PhonePe’s Chief Technology Officer (CTO) confirmed that the disruption was due to a technical malfunction related to a data centre relocation. The company had shifted to a new data centre a short time ago to expand capacity and improve performance. However, the newly allocated infrastructure reportedly could not handle the sudden boom in traffic, leading to widespread service disturbances.
The CTO stated that a capacity miscalculation during the shift caused the system to become overwhelmed, particularly during peak usage hours.
Although PhonePe was the most visibly affected, some reports indicate that minor slowdowns were also observed on other UPI platforms as well. However, PhonePe’s services were critically impacted due to the internal infrastructure change.
After finding the root cause of disruption, PhonePe’s engineering and infrastructure teams acted quickly to address the issue:
•Traffic diversion was executed to reduce pressure on the overloaded data centre.
•Temporary evaluating measures were put in place to restore partial functionality.
•The company claimed that a permanent fix has now been put into practice and services have largely stabilized.
PhonePe issued public statements via social media, acknowledging the outage, apologizing to users, and assuring them of restored services.
PhonePe has been steadily investing in building its own data centres to work in accordance with data localization mandates and support its massive transaction volumes. It has already spent $150 million and plans to invest another $50 million to expand capacity across multiple facilities in India, including new centres in Bengaluru and Navi Mumbai.
These expansions are focused at giving PhonePe better control over its infrastructure, ensuring, evaluating and reducing dependence on third-party providers. However, as the May 12 incident shows, such transitions come with risks if not meticulously managed.
The disruption emphasizes the critical importance of strong or quickly recovered infrastructure in India’s rapidly growing digital payments field. UPIs‘ are completing nearly 20 billion transactions per month, even little service disturbance can affect millions and break user trust.
PhonePe’s quick acknowledgment of the issue and ongoing infrastructure investments reflect an active approach. However, the incident highlights the need for stronger testing and better contingency planning during major infrastructure changes.
The recent UPI crash at PhonePe is more than just a little inconvenience—it serves as a critical case study in the growing pains of India’s digital financial infrastructure. As platforms like PhonePe continue to improve rapidly, they face immense pressure to deliver unstoppable service to millions of users who rely on digital payments for daily needs—from grocery shopping to business transactions.
1.When did the PhonePe outage occur?
Ans. The UPI crash took place at 7:30 pm on 12th of May 2025 and continued for many hours, affecting users across India.
2.Was the outage limited only to PhonePe?
Ans. Yes, PhonePe was the most badly affected platform. While minor slowdowns were reported on some other UPI apps.
3.How did PhonePe respond to the outage?
Ans.PhonePe’s technical team quickly relocated traffic, gave temporary scaling solutions, and later arranged a permanent fix. The company also issued public apologies and status updates through social media.
4.Is the issue now fully resolved?
Ans.Yes, according to PhonePe, the technical issues have been fixed and services have been recovered. UPI transactions are now working normally.
5.How many people were affected by the outage?
Ans.Exact numbers weren’t yet known, but given PhonePe’s huge user base (over 500 million), millions of users were likely affected.
6.Will this affect PhonePe’s reputation or market share?
Ans. While the crash may have temporarily affected user confidence, PhonePe’s quick response and continued investments in infrastructure show its commitment to long-term stability.
