NPCI launches auto debit feature on UPI

The National Payments Corporation of India (NPCI) has launched UPI AutoPay, which will allow recurring payments on Unified Payment Interface (UPI). This is part of UPI 2.0, the updated version of the instant payment system run by NPCI.

Under this product, consumers will be able to set an auto debit facility on their UPI apps for transactions from their connected bank account. For transactions up to Rs 2,000, there will have to authenticate once, post that there is no need to type in their UPI pin repeatedly. But for transactions above Rs 2,000, pin continues to be mandatory.

This move will help smoothen the process of recurring payments like monthly systematic investment plans (SIPs), insurance premium payments, subscription payments and OTT payments. Currently, to enable this feature, consumers either have to give a National Automated Clearing House (NACH) or a physical mandate.

Moneycontrol wrote first about this upcoming launch of UPI AutoPay on May 27.

Interestingly, UPI 2.0, which was launched in August 2018, was supposed to have this feature, but then had given it a miss. The Reserve Bank of India (RBI), sources pointed out, was not keen then to allow recurring payments on UPI. Given that UPI is the current payment mode of choice for consumers and it has scaled up to a billion transactions monthly, the product had received regulatory nod.

NPCI said in a statement that every UPI app will have a separate ‘mandate’ section through which consumers will be able to provide, modify and even revoke a mandate. The mandates can be set daily, weekly, monthly, yearly and so forth.

“The UPI AutoPay offering would provide millions of UPI user’s convenience and safety while making recurring payments. This facility will benefit customers and merchants with an all new recurring payments experience. We hope to achieve new milestones by expanding UPI's presence especially in the person-to-merchant (P2M) payment space,” said Dilip Asbe, CEO, NPCI.

Among the bank rolling out this feature now include Axis Bank, Bank of Baroda, HDFC Bank, Paytm Payments Bank and State Bank of India (SBI).