Customers, merchants can use UPI Autopay facility for recurring payments

The National Payments Corporation of India (NPCI) has recently launched the Unified Payments Interface (UPI) AutoPay for recu­rring payments. The process doesn’t require several layers of authorisation, thereby making it simpler for consumers to make small payments.

UPI transactions hit an all-time high of 1.34 billion in June, with transactions of over Rs 2.61 trillion clocked in June alone.

Features:

This facility gives both the customer and the merchant the ability to set up autopay for recurring payments. For instance, customers and merchants can enable recurring e-mandate using any UPI application for recurring payments, such as mobile and electricity bills, entertainment and over-the-top subscriptions, insurance, equated monthly instalment payments, and mutual funds loan payments.

Limit: 

Mandar Aagashe, founder and managing director (MD), Sarvatra Technologies, says: “Only if the amount exceedsRs 2,000 will you have to execute the UPI PIN.”

If it’s less than Rs 2,000, you can simply set it and never have to worry about a missed bill again. This is part of UPI 2.0 - the updated version of the instant payments system by NPCI. The e-mandate can be set instantly.

Until now, customers needed to visit the branch or call the bank executive home and submit a form for electronic clearing service (ECS) or National Automated Clearing House mandate.

 

Harshil Mathur, chief executive officer (CEO) and co-founder of Razorpay, says: “With consumers opting for contactless payments in times of Covid, the UPI has turned out to be the preferred payment mode for many.” You can also pause the mandate and restart it later. There is no upper limit to the number of UPI mandates you can add. While UPI doesn’t have any charges, some banks have now started charging when you use the UPI service: it’s between Rs 2.50 and Rs 5 per transaction after the free threshold is breached.  

Risks: 

Aagashe adds: “If you get a request from an unknown biller, even for a small amount, do not accept it blindly or share the PIN. Nobody should ask for a PIN in the first place.” Most frauds have happened due to disclosure of PIN. Remember, the merchant, too, can send a collect request and enable the autopay facility by setting up the UPI 2.0 feature. Rajesh Mirjankar, MD and CEO, Infrasoft Tech, says: “This takes away the friction out of the equation. With every reduced conversation between the customer and the merchant, it enables greater digital velocity of the transaction.”

Fact remains that customers have to be educated about the mandate and ensure they do not set up auto­p­ay for a problem recipient, or do not do due diligence. This is quite com­mon in the case of ECS or small credit card payments for subscriptions.

Mirjankar says: “Ensure you are monitoring your transactions regularly and also keeping track of your banking messages. While setting up autopay, if you get a request from a merchant site, make sure the UPI is valid. For instance, when PM CARES was set up for Covid relief, fraudsters were trying to set up similar IDs like PMSCARES.” Fraud­sters may pretend to be merchants and send phishing emails or text messages.

Be doubly careful while approving the merchant’s e-mandate.