Reconcile UPI receipts in two stages: match successful customer payments to your acquiring bank or payment provider’s settlement report, then match each settlement batch to the credit shown in your bank statement. Explain any difference with separately documented refunds, reversals, fees, taxes or adjustments; keep anything unexplained in an exception register rather than labeling it a fee.
What you are reconciling
A successful UPI payment and a credit in your business bank account are related, but they are different checkpoints. The payment record shows what the customer paid; the settlement report shows how the provider grouped and processed transactions; the bank statement shows what was actually credited. NPCI describes reconciliation using its reports alongside banks’ own reports, with adjustments for exceptional transactions. NPCI’s UPI settlement process describes the member-bank process; your provider’s report names and available fields may differ.
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The basic bridge for a period is: successful payment value, adjusted for supported refunds and reversals, less documented charges and taxes, plus or minus documented adjustments, compared with actual bank credits. Do not assume one bank deposit equals one customer payment: a credit may cover a settlement batch. Preserve the link from each deposit to its batch report.
How to reconcile UPI payments step by step
1. Set the period and cut-off
Choose a regular period—daily for high-volume operations—and use the cut-off and timezone stated by your acquiring bank or payment provider. A calendar day or business day may not line up with a settlement batch. Record the provider’s batch reference and date so transactions near a cut-off are not assigned to the wrong period.
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2. Collect the records
For the same period, obtain the provider’s UPI transaction export and settlement report, your bank statement, and itemized fee and tax documents. Keep the original exports unchanged and note when and where you downloaded them. NPCI’s materials describe daily settlement reporting in the member-side process and recommend downloading settlement and adjustment reports for reconciliation; merchant portals and filenames vary. NPCI’s 2017 circular is directed to member banks, so confirm your provider’s current merchant process and retention requirements.
3. Match transactions to settlement batches
Use the strongest references present in your records, such as UPI transaction ID or RRN, provider payment or order ID, settlement batch reference, amount, status and timestamp. Match successful payments to the relevant batch. Amount alone is weak evidence when repeat purchases can have identical values.
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Keep failed, pending, duplicate, refunded, reversed and disputed items identifiable rather than treating them as successful settled receipts. The exact fields available depend on your acquiring bank or payment provider.
4. Match settlement batches to bank credits
For each batch or period, total the matched successful payments. Then account for documented refunds and reversals, provider charges and taxes, and other supported adjustments. Compare the resulting expected net amount with the bank statement. If one batch is paid through multiple credits, or one credit covers several batches, retain a clear bridge showing which report amounts make up the bank entry.
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The sources describe report-based settlement reconciliation, but do not prescribe a merchant worksheet or specific accounting entries. Use the chart of accounts and posting treatment agreed with your accountant.
5. Verify charges against your agreement
Check the signed merchant agreement, current fee schedule, settlement statement and tax invoice. A fee line should have a contractual basis and itemized support. Distinguish a processing charge from a refund, settlement adjustment, delayed credit or bank-side posting issue; do not use an unexplained difference as a balancing fee.
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Do not apply a universal UPI merchant fee percentage. The cited RBI directive is specifically about unbundling merchant discount rates for debit, credit and prepaid cards; it is not a UPI tariff. RBI’s September 1, 2016 directive tells acquiring banks to clarify charges for those card categories. Your current provider agreement and itemized records are the relevant basis for UPI charges.
6. Track and resolve exceptions
Maintain an exception register with the transaction reference, date, amount, status, expected settlement, provider case or reference, owner and resolution. Keep the original reports, provider correspondence, corrected exports and supporting accounting entries together. Raise UPI transaction-status or merchant grievances with your acquiring bank; NPCI’s FAQ directs merchants to the acquiring bank and says refunds follow the defined bank process. NPCI’s UPI FAQ provides the relevant guidance.
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What to do when the numbers do not match
- Payment appears successful but is absent from the settlement report: check its transaction status, timestamp and batch cut-off, then ask the provider or acquiring bank to trace it using the transaction reference.
- Settlement report total differs from the expected net amount: inspect itemized refunds, reversals, fees, taxes and adjustments. Request documentation for any line you cannot tie to a transaction or agreement.
- Settlement report agrees, but the bank credit is missing or different: compare the batch reference, value date and credit entries on the statement; raise the discrepancy with the acquiring bank or provider.
- A refund or reversal appears later: record it as its own traceable item and link it to the original transaction. Do not silently net it against unrelated receipts.
- The provider’s reports or fee description are unclear: ask for the transaction-level or batch-level explanation and the contractual basis. Keep the response with the reconciliation record.
Current settlement-cycle reporting change
NPCI Circular 222A, dated October 29, 2025, states that from December 15, 2025, adjustment reports for cycles 1–10 would stop and adjustments would be processed in dedicated cycles 11 (DC1) and 12 (DC2). This is an operational change for participating members and reporting infrastructure, not a new merchant accounting rule. Use the current report format and instructions surfaced by your own acquiring bank or payment provider. Read NPCI Circular 222A.
Choosing a reconciliation workflow or tool
Whether you use spreadsheets or accounting software, assess the workflow against the records your provider actually supplies. Useful capabilities include:
- Importing transaction-level reports and retaining transaction identifiers.
- Matching settlement batches to one or more bank credits.
- Recording fees, taxes, refunds, reversals and adjustments separately.
- Maintaining an exception queue and an auditable resolution trail.
- Exporting records, controlling access and meeting your business’s retention needs.
- Working with your existing accounting ledger at a cost that suits the business.
A manual ledger can help record exception notes, but it cannot replace provider exports or bank-statement reconciliation.
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