In the recent years, we’ve seen significant growth in specifically, two payment trends — in 2016, India launched the Unified Payments Interface (UPI) system, which enabled businesses and consumers to make and receive payments in real-time in a secure manner. January 2023 recorded 6,752 crore UPI transactions worth INR 113 lakh crores, and this number is expected to keep growing.
Secondly, there has been significant growth in the adoption of recurring payments. For instance, from 2019 to 2021, steady growth was seen in subscription payments for various services among consumers. Other recurring payments included EMIs, insurance renewal, mutual fund SIPs, and OTT subscriptions.
UPI AutoPay is where these two significant payment trends meet. In this blog, we explain what UPI AutoPay is and its benefits for businesses and consumers with recurring payment needs.
What is UPI AutoPay?
With UPI growing in popularity in India, more and more consumers are looking to use it to automate even future payments. Hence, in July 2020, the National Payment Corporation of India (NPCI) launched UPI Automatic Payment, or UPI AutoPay, to help automate recurring payments from one’s respective bank account by leveraging the UPI network.
Recurring payments are essentially fixed amounts that need to go out at regular intervals. They could be weekly, monthly, quarterly, bi-annual, or annual payments. For instance, a consumer may wish to automate their yearly insurance payment, their monthly subscription for their streaming platform of choice, or activate equated monthly instalments (EMI) on a large-ticket credit card payment.
Businesses can give their consumers the option to automate recurring payments via UPI AutoPay securely and as per their needs.
How UPI AutoPay works
UPI AutoPay is viewed as a major disruption in the payment space because it serves a growing consumer and business need. In December 2021, registered banks recorded 6 million mandates for UPI AutoPay, up by 32% from November 2021, which recorded 4.55 million mandates.
A mandate refers to the option which enables consumers to automate recurring payments via UPI AutoPay. This means they can create, modify and approve instructions. They can also revoke or pause auto-debit mandates based on changing circumstances.
Consumers need to offer a one-time approval to businesses for which they wish to automate payments. They will also need to add additional details such as the start date, business name, and frequency of the debit.
Say a customer wants to automate a recurring payment for an OTT subscription. The customer can complete instructions in a few steps. First, they will need to select a subscription plan, followed by a one-time activity that requires them to approve a transaction using a UPI PIN. Once they have added the desired payment frequency and other details, the mandate for UPI AutoPay is ready for execution.
The customer does not need to invest any more time in recurring transactions. However, they have the power to revoke or pause future payments at any given time.
Benefits of UPI AutoPay
UPI AutoPay is an extremely beneficial opportunity for businesses which need to continue growing revenues to stay profitable. It comes with the following benefits:
- It brings convenience for the customer by automating the process of recurring payments. This trend mirrors consumer behaviour, where they are continuously trying to save time and effort by using technology. There is no paperwork or physical documentation required. Everything can be done from one smartphone. Lastly, this mode gives consumers the power of choice, which is a growing desire among this group.
- UPI AutoPay is a completely hassle-free and secure process. Consumers are looking for both these features while selecting any payment mode. Today, consumers can authorise up to INR 15,000 per transaction using UPI AutoPay and up to INR 1,00,000 via authorisation on the due date. Hence, it is yet another step in strengthening confidence in cashless and digital payments.
- Another key benefit for consumers is that they can change the mandate for UPI AutoPay or pause and even revoke it per their needs.
- Activating UPI AutoPay ensures timely payments and helps consumers reduce expenses on penalties and late fees, which collectively add up to a significant sum.
- The introduction of UPI AutoPay is beneficial for businesses, too, as it enables them to collect timely payments and maintain their cashflows. Companies can reduce the amount of time and effort they invest in following up with consumers for new payments at the relevant frequency.
Consumers are looking to automate several processes to make life more simple. They do not wish to miss a payment and face penalties and late fees. UPI AutoPay is one of the key solutions to this problem because UPI enables payment via various modes. Businesses that activate the UPI AutoPay option for customers will develop a competitive edge in a crowded and competitive market and gain market share.
To ensure a hassle-free, efficient, secure payment experience for a business’ customers, companies can partner with a tech-enabled service provider that has incorporated UPI AutoPay options into their payment gateways.
Plural teamed up with Setu to bring the UPIverse — a complete suite of UPI offerings for businesses, namely:
- UPI Switch by Setu
- Payment gateway with UPI Intent flow
- UPI Autopay
- UPI DeepLinks by Setu
Interested in getting started? Drop in your details here and get early access.
Plural by Pine Labs has received an in-principle authorisation from the Reserve Bank of India (RBI) to operate as a Payment Aggregator.
Setu has received an in-principle authorisation from the Reserve Bank of India (RBI) to operate as an Account Aggregator.
Amrita Konaiagari is a Marketing Manager at Plural by Pine Labs and Editor of the Plural blog. She has over 10 years of marketing experience across Media & Tech industries and holds a Master’s degree in Communication and Journalism. She has a passion for home décor and is most definitely a dog person.