Does 10% Failure Rate On One Billion Transaction i.e.100,000,000 Decline Per Month Worry You?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:

Mr. Kamonasish Aayush Mazumdar, Founder & CEO at Foodieverse
Mr. Jayesh Shah, CEO, Prism Cybersoft Private Ltd
Mr. Ishan Vaish, India Partnership Manager- Worldwide Developer Relations, Apple
Mr. Vivek Singh, Head Payment Solutions & Product, Airtel Payments Bank
Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

So here’s a question thrown up by FIAKS community members, Isn’t UPI success rates just 65%, technically speaking? Also hearing most of the failure is SBI related from some quarters;

Well, a member mentions, “UPI average payment success rates are in the range of 88% and 11 % is business decline as per NPCI records.” (Refer to ET report on this subject enclosed at the end of the discussions )
65% is specific to P2M transactions and this includes the overall funnel success rates which include drop-offs in UI/UX (User interface/User experience) and user not responded etc. Well, this sounds good but for all practical purposes, it still means 65% aggregate. There is so much room to improve, isn’t it?
Thereupon a member opines, “I don’t think you can consider 65% aggregate and consider it as the overall success rate. Since this also includes users just experimenting and may not always have an intent to pay. 12% failure is definitely an area to work on”
12% has 11% in business declines like low balance incorrect inputs like mPin, etc. Tech decline is 1% only. This is how the product grows, right? The user should feel magic, not product flow. That’s not his job?
The key difference between UPI and other products like the card, net banking, etc is in the additional multi factors like app push, intent calls, etc which are highly user and PSP-dependent.

It’s a very large number, on a pretty well-penetrated product, well penetrated for its SAM not TAM (TAM is Total Available Market and SAM is Serviceable Available Market), isn’t it?

Well penetrated is a perception. We are in a country where people using UPI don’t know what is UPI or what their UPI id is!
Even a very well penetrated card funnel (which has been there for decades) you see 20-25%+ drops depending on the use case
12% is the real concern. My sense is the rest 35% will gradually reduce with the ecosystem growth. Not to say user experience cannot be improved. On the contrary, a member believes, “My sense is that it will gradually increase”
A member mentions, “Honestly I feel that 1% bank tech failure for a payment system is also very high. Financial products should be at 99.5% success rates. I don’t think people even accept anything less than 97% failure upfront. Anything less than six sigma for payments product is low nevertheless. But I guess the other funnel related to user experience especially on bank apps doing UPI is a big area crying for improvement.”

Now a member shares a personal instance, I laugh every time when banks ask consumers what’s your VPA. Who understands VPA? My neighbor 60 years old who is an SBI customer was trying to use YONO called me because the options said pay to a VPA. He was like I want to do UPI but don’t know what a VPA is! Well, an individual account is uniquely mapped to a Virtual Payment Address (VPA). Customers can create multiple VPAs to send and receive money!