There are times when we forget to pay our utility bills and insurance premiums before their due dates. So, we end up paying late fees on utility bills. An insurance policy lapses if the premium is not paid on time.
Recently, the National Payments Corporation of India (NPCI) launched the UPI AutoPay feature, which will allow recurring payments via the Unified Payment Interface (UPI).
With this feature, consumers can set up auto debit instructions on their UPI mobile applications for debits from their linked bank account.
“Bank customers can set up recurring payments on UPI for their systematic investment plans (SIPs) in mutual funds, loan EMIs (equated monthly instalments), insurance premiums, utility bills, over-the-top (OTT) platform subscriptions, and more,” says Sanjeev Moghe, EVP and Head of Cards & Payments of Axis Bank.
“In this era of technology, the UPI Autopay will help customers make recurring payments in a smart, convenient and safe way. Customers using this feature will not have any stress of late charges. This feature will be an additional boost to UPI, which has been witnessing a surge in usage,” says Ajay Khurana, Executive Director of Bank of Baroda.
Axis Bank, Bank of Baroda, HDFC Bank, Paytm Payments Bank and State Bank of India (SBI) among others have rolled out this service so far.
How should I set up payments using the UPI AutoPay?
A consumer can register for the UPI AutoPay mandate from a merchant’s website as well as from the UPI app he/she uses. You need to provide the merchant’s UPI ID, frequency of the payment, amount to be debited (fixed or up to a certain value) and the validity period of the recurring payments while registering.
You will receive a notification to authorize the AutoPay request on the UPI app. You need your UPI PIN to authorize it. After your UPI PIN is verified, you will receive a confirmation message on registered email id and mobile number from the merchant of the AutoPay facility setup is successful.
After the successful registration of UPI AutoPay, the payment will get processed as per the given instructions. Praveena Rai, Chief Operating Officer of NPCI says, “To provide information and comfort to the user, there will be a notification at least 24 hours before the amount is deducted from the bank account and after the amount is deducted as well. The consumer also has the flexibility to cancel, pause and modify the UPI AutoPay instruction, taking into consideration any obligations the consumer has with the merchant.”
You can benefit from this feature as mandates are generated instantly and payments get deducted automatically on the authorized date. There are no charges levied by banks for setting up the UPI AutoPay facility.
What is the frequency of recurring payments that can be set-up using the UPI AutoPay?
The frequency of recurring payments available is daily, weekly, fortnightly, monthly, bimonthly, quarterly, half-yearly and annually or as and when presented by the merchant. The payment options could vary from merchant to merchant as per the payment option on its website. For instance, you can set-up monthly SIP to invest in mutual funds with an Asset Management Company (AMC). Similarly, you can set up half-yearly or yearly insurance premium payments. To use this facility, AMCs and insurance companies need to provide the UPI payment option.
Do I need to enter my UPI pin to authorize every UPI AutoPay payment?
No. For recurring transactions of up to Rs 2000, you will have to give an authorization once, after which you don’t need to authorize the transaction with the pin. However, if the value of the transaction is more than Rs 2000, the UPI pin continues to be mandatory for completing the transaction.
What happens if I don’t have sufficient balance in my account when the recurring payment is due to be debited?In such situations, your UPI AutoPay recurring payment will fail and the merchant will be informed you about the payment failure. “Your bank will not levy any fine or penalty for not maintaining sufficient balance for the recurring payment,” says Moghe. If this was the very first AutoPay debit for the customer failed due to insufficient funds, the mandate will be cancelled. For any subsequent debit failure due to insufficient funds, the mandate will not get cancelled and subsequent debits will be attempted as per the frequency set for AutoPay.