Tag: UPI AutoPay

Game changer feature opens a new chapter in recurring payments

UPI AutoPay heralds a new dawn for the auto-debit concept across sectors and is expected to greatly facilitate participation by customers and merchants alike, says Ketan Kothari, Director of Arvog.

The COVID-19 pandemic has transformed every facet of life as we knew it and financial transactions have been no exception. However, there is one phenomenon that hasn’t changed despite a visible shift to the ‘new normal’ across the board, namely the penalty imposed for delays in making recurring payments. While the obvious solution of giving an auto-debit mandate for such recurring payments through bank ECS or a credit card was always available, the process involved in setting it up had proved to be a deterrent, making people hesitant to take that step.

However, with National Payments Corp of India (NPCI) recently launching the functionality of AutoPay for recurring payments on the Unified Payments Interface (UPI) platform, this concept has become much easier to accept and implement. Recurring transactions for amounts within the Rs. 2000 limit towards charges for cell phone services, electricity bills, entertainment/ OTT subscriptions, monthly investments in SIP, gold locker can also be enabled via the UPI AutoPay feature among others will be done automatically after the first mandate whereas payments greater than that sum will still require the UPI PIN each time. RBI will increase the limit as and when it sees gaining traction, just like the ‘tap and pay’ feature of contactless payments by credit card using the NFC technology which was introduced in 2015.

Enabling customized payment schedule options like on a monthly, quarterly, half-yearly, or annual basis, UPI AutoPay facilitates the cashless mode of transacting for people belonging to diverse economic segments, something that was essential given the ongoing pandemic and beyond that as well, giving an impetus to the goal of India becoming a truly digital economy. Avoiding late fees or penalties is now, to use a popular idiom, ‘as easy as pie.’ GOI and RBI are working closely to bring about a digital transformation which would be beneficial for the country in the long run as all the initiatives are taken by the government in the last few years which perfectly seems to fall in place like – Jan Dhan Yojana, Demonetization, Implementation GST, linking Aadhaar to the bank account is all part of the Digital India Plan wherein there will be more transparency, less dependency on intermediaries for the flow of funds from Government to individuals.

Best of all, it offers a secure and convenient way to do recurring payments with no waiting in long queues, no documentation, and paperwork required, making it an ideal, one-point solution. The UPI AutoPay feature has been enthusiastically received and many lenders have rapidly made the functionality available as have leading aggregators.

The benefits of UPI AutoPay will be visible across six key sectors impacting our lives – Financial Services, Media, Transit, E-Commerce, Education, and Online Delivery. EMI payments for insurance, mutual funds, and so on can now be done with complete peace of mind; no more concerns when it comes to missing the due date, or having to set reminders.

Small ticket size loans like payday loans, early salary loans, cash, and recharge loans where this feature would be beneficial to both lenders and the borrowers by enabling easy collections and paying the EMI amount or interest payments on time to avoid any penalty fees respectively.

E-Commerce is expected to get a huge fillip as the ‘buy now and pay later’ facility can be availed through UPI AutoPay. Being able to avoid crowds combined with the ease of doorstep delivery and no hassles of searching for the exact change to make the cash on delivery (COD) payment make it a win-win.

The ability to modify/ revoke/ pause for changing the orders placed as and when required will give customers the confidence to keep shopping and ensure enough demand so the economy continues to run smoothly. Being able to acquire knowledge from the comfort of your home is fast becoming the future of learning and this is where UPI AutoPay helps you by making it feasible to attend by paying fees in installments instead of in a lump sum.

It is contemplated that this feature will expand the presence of UPI and give an additional boost. UPI Autopay has the potential to amplify digital payments in India; the inference that it would indirectly assist in controlling the coronavirus spread is just icing on the cake.