📌 How to Get Compensation for Failed UPI Transactions (India)

Balasahana Suresh
Unified Payments Interdata-face (UPI) is usually fast and reliable, but sometimes money gets debited from your account even though the payment fails or isn’t credited to the beneficiary. In such cases, indian regulators have rules to protect users and even compensate you if there’s a delay in refund.

🕒 When Should You Get a Refund?

Under the Reserve bank of India (RBI) / NPCI timelines:

🔹 Refund Time

✔ For most person‑to‑person (P2P) UPI transfers that fail:
👉 It should be refunded automatically within 1 working day (T+1) of the failed transaction.

✔ For merchant payments (P2M) that fail:
👉 The refund may take up to 5 working days.

Often money is reversed in a few hours or directly within the next business day.

💰 Compensation for Delayed Refunds

If your money is not refunded within the RBI‑specified period and the delay is due to the bank/payment system (not your own input error):

  • You are eligible for compensation of ₹100 per day from the second day onward until the amount is returned.
  • This penalty must be paid by the bank or payment service provider to you.
⚠️ Compensation applies only when the system (bank / payment app) is at fault, not if the transaction failed due to user error (wrong UPI ID, incorrect PIN, canceled payment, etc.).

📝 How and When to Raise a Complaint

1. Wait for the Standard Refund Window

  • Most refunds arrive quickly (often within 24–48 hours).
2. Check Transaction Status

  • Open your UPI app → Transaction history → Find the failed transaction and note the Transaction Reference/UTR number.
3. Contact customer Support

If the refund hasn’t arrived after the expected time:

  • Use the help or complaint section in your UPI app (Google Pay, PhonePe, Paytm, BHIM, etc.).
  • Provide: Transaction ID, date, amount, and screenshots if possible.
4. Contact Your Bank

If the app doesn’t resolve the issue:

  • Call or email your bank’s customer care.
  • They are responsible for tracing and processing the reversal.
5. Escalate if Needed

If your bank / app doesn’t resolve it within the refund + compensation period:

  • File a complaint on the NPCI UPI Dispute Redressal portal: https://www.npci.org.in/what‑we‑do/upi/dispute‑redressal‑mechanism
  • If unresolved even then, you can approach the Banking Ombudsman / RBI CMS portal for adjudication.
🧠 Tips to Smooth the Process

✔ Act promptly: Check status and file your complaint soon after the refund period expires.
✔ Keep records: Screenshots, transaction IDs, bank statements all help speed up resolution.
✔ Different banks may sync differently: If sender and beneficiary banks are different, reconciliation may sometimes take slightly longer, but compensation still applies if deadlines are missed.

📌 Quick Summary

Step

What Happens

T+1 day

Failed UPI refunded automatically (P2P)

Up to T+5 days

Merchant payment refunds

After deadline

₹100/day compensation from bank/app

Complaint steps

App → bank → NPCI portal → banking Ombudsman

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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