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National Payment Corporation of India (NPCI) on 22nd July 2020, launched UPI AutoPay for recurring payments using the UPI trail. This facility is a part of UPI 2.0
What is UPI AutoPay?
UPI AutoPay is a feature that allows customers to enable e-mandate using any UPI application without having to enter a PIN for every recurring payment such as EMI payments, insurance, mutual funds, ed-tech courses, utility bills, and OTT subscriptions among others.
UPI AutoPay feature benefits users as well as merchants because UPI mandates are generated instantly and payments are deducted automatically on the authorized date.
A business can set the mandate for one-time, daily, weekly, fortnightly, monthly, bi-monthly, quarterly, half-yearly, and yearly recurring payments.
Real-Life Example of Autopay
We receive an electricity bill every month, and it can be tiresome to keep track of paying it on time. Instead of manually making the payment each month, it’s best to set up autopay. This not only ensures timely payment but also reduces the risk of a late-payment penalty.
Choose any UPI app of your choice and sign up on the platform; enter the details, which include your personal details along with your debit card or bank details. Enter the phone number associated with the bank account and complete your autopay setup. Let’s say you choose PhonePe as your UPI partner; there, you get an option to set an autopay for the respective bill. Set the maximum limit as per your estimation of your monthly bill, and authorise the autopay by enabling it through UPI PIN.
Once autopay is enabled, every month on the due date, the electricity bill generated will automatically deduct the amount as per the bill from your bank account. Once deducted, you will receive a text message or an in-app notification once the payment is processed. This ensures no payment is missed or leads to a late fee penalty.
Here, you can also take the example of mutual funds, where payments are automatically debited on the same date each month. For the timely processing of your mutual fund SIP,
The autopay app also sends out a notification two to three days prior to the due date to remind the payer to keep enough funds in their bank account so that the amount can be automatically paid without inconvenience.
How Does UPI AutoPay Work?
- A merchant that wants to offer recurring payments via UPI AutoPay needs to register with a recurring payments service provider like Cashfree Payments, which supports UPI AutoPay.
- Merchants can offer the user the option to create an e-mandate through UPI ID, QR scan or Intent.
- On receiving the e-mandate authorization request, the user can open a UPI app, go to the mandate section, review the mandate details, select the bank/debit card, and enter the UPI PIN to authorize the e-mandate.
- Once the user authenticates, the bank account linked with the UPI ID will get auto-debited, and the amount will flow to the merchant’s account as per the recurring payment terms.
What is the Limit on UPI Autopay Transaction Value?
E-mandate on the bank account and debit cards: Rs. 1 lakh
E-mandate on UPI AutoPay: Upto Rs.15,000 can be set without UPI PIN for every debit
What is an On-Demand UPI Autopay?
Now that our concepts on UPI autopay and recurring billing are clear, let’s move on to the next topic.
So, what are On-Demand UPI subscriptions?
Well, it is an extension of the UPI Autopay service. With On Demand subscriptions, businesses can personalize their recurring billing according to the customer’s requirement.
But how is that different from normal UPI Autopay services?
Here’s how-
So, you, as a merchant, can choose to edit the recurring billing specifications like:
- Frequency
- Amount
- Period
Here’s an example for better understanding.
Let’s say you own a gas agency. Now, the gas utility bill shall vary according to the units consumed.
| Price Per Unit | Gas Units Consumed | Time Period For Recurring Billing | Total Amount |
| Rs. 10/unit | 100 | 28 days | Rs 1000 |
| Rs. 10/unit | 150 | 28 days | Rs. 1500 |
Hence, your On-Demand UPI Autopay PSP allows you to charge your user on the basis of their consumption.
For more information on On-Demand UPI Autopay service by Cashfree Payments, click here.
How does UPI benefit businesses and individuals?
UPI (Unified Payments Interface) has transformed the way money moves in India by making digital payments simple, fast, and accessible to everyone. It benefits both individuals and businesses by removing friction from everyday transactions and enabling a truly cashless, real-time payment ecosystem.
Benefits of UPI Autopay for Individuals
UPI is one of the best gifts of the digital world that individuals could ask for. UPI Autopay offers unmatched convenience. Autopay allows individuals to instantly make payments directly to bank accounts, either of businesses or individuals. And all of this can be done with just a simple mobile number or UPI ID and without the requirement of any account number, IFSC code, or other bank transfer details.
With UPI autopay, you can make payments anytime, anywhere, including weekends and holidays, making it the ideal choice for individuals when they need to pay bills or send money to their distant relatives in case of emergency or festivals. UPI is a secure payment method wherein, before processing the transaction, the individual is asked to authenticate the payment. Through a two-factor authentication step, an OTP on mobile or email and a UPI PIN should be entered before the payment. This gives the user the security and confidence they wish for when managing finances. Making UPI payments is affordable and low-cost; either you pay manually or set up a UPI autopay.
Benefits of UPI for Businesses
UPI allows businesses to reach individuals across states, which leads to the growth and expansion of their business. And UPI Autopay helps businesses achieve their predictable growth and leads to timely collection in cases where their business type is related to subscriptions, insurance premiums, EMIs and utility-related matters. UPI Autopay in businesses improves cash inflows by reducing manual effort and resources on follow-ups, sending continuous reminders to users, and manual reconciliation. With UPI Autopay, businesses easily move from being a last-minute collector to an automatic, proactive receiver.
UPI Autopay is equally beneficial for both individuals and businesses, creating a win-win ecosystem. It improves efficiency and enhances customer-merchant satisfaction and trust.
What are the advantages of using UPI Autopay?
UPI autopay not only pays your bill automatically but also provides peace of mind that you are financially committed. Let us go through the advantages of using UPI Autopay.
- Convenience and Time-Saving
UPI Autopay is a convenient way of processing payments. It eliminates the constant need to remember the due dates in cases where the transaction has to be processed every month. Hence, with UPI Autopay, the payments are deducted automatically on scheduled dates.
- Avoid Late Fees
UPI autopay ensures timely payments for subscriptions and EMIs for paying utility bills. This eliminates the issue of late fees and service interruptions, if any. UPI Autopay is extremely beneficial when you have to pay subscription-based fees for platforms like OTT services or mutual fund SIP deductions.
- Flexibility and Control
With UPI autopay, you have control in your hands; you can set up autopay for services you plan to have every month or every year. You have the control and flexibility to set recurring payments with an option to set minimum and maximum limits.
- Easy Management
It is easy to manage payments, as you have the ability to create a mandate, approve a mandate, modify it, pause it or revoke it directly from the UPI app. UPI management is easy, quick and hassle-free.
- Enhanced Security
UPI Autopay ensures transaction safety, as it is built on a robust security framework designed to protect both users and merchants. Without the customer’s consent to deduct the amount through a UPI autopay feature or a simple UPI payment, the transaction will not be processed. UPI has strong authentication and encryption to ensure every user’s data is safe. All transaction data is encrypted and processed through NPCI-regulated systems, reducing the risk of fraud or unauthorised access.
- Pre-debit Notification
Users who have set their autopay or mandates do receive notifications before money is deducted, ensuring transparency and control. This notification is about informing the user to keep enough funds for the specific purpose for which the money is going to be debited in the next two or three days. This is extremely beneficial in mutual fund SIP deductions (mostly monthly) and annual or monthly subscriptions like Apple Music or YouTube Premium.
Comparing UPI AutoPay and Other Recurring Payment Methods
Recurring payments in India can be enabled using standing instructions on credit cards, e-mandate via authentication using net banking, debit card and also by enabling e-mandate using UPI AutoPay.
Let us compare UPI AutoPay and other recurring payment methods.
Did you know?
The maximum amount for any one transaction with physical mandates is Rs 1,00,00,000 (1 crore or 10 million).
UPI AutoPay feature is not only easier for businesses to implement but is also convenient for users. Using any UPI App, a user can create, approve, modify, pause and also revoke auto debit mandates anytime. Moreover, the UPI AutoPay features gives the user access to their past mandates for their reference and records.
List of Banks and UPI Apps Live on UPI AutoPay
As of August 2022, 140 banks are live on UPI AutoPay.
Further, BHIM (Bharat Interface for Money) the mobile payment App developed by NPCI is the first UPI-based app to support the UPI mandate feature.
Introducing UPI AutoPay on Cashfree Subscriptions
We have added UPI AutoPay as an authentication mode on our recurring payments platform Cashfree Subscriptions. Therefore, with this update, Cashfree Subscriptions users can now offer their customers the option to enable recurring payments using the widest range of modes including standing instructions on credit cards, e-mandate-based payments via debit cards, net banking and UPI.
Cashfree Payments offers UPI Autopay services with 20+ UPI apps including PhonePe, Google Pay, Paytm, BHIM and Amazon Pay
Setting up Recurring Payments with Cashfree Subscriptions
With Cashfree, you can set up subscriptions and create a great experience for your customers while minimising engineering investment. Cashfree Subscriptions is fast to configure, preview, test and also to deploy.
Here is how Cashfree Subscriptions works!
Check out the integration guide for step-by-step instructions.
Register to get early access to UPI AutoPay
Creating a UPI mandate using Cashfree Subscriptions UPI AutoPay is a simple process. Check out how Cashfree Subscription is the fastest and easiest way to enable recurring payments. [ UPI AutoPay mandate flow on WhatsApp included]
For our existing Cashfree Subscriptions users UPI AutoPay will be directly enabled on merchant accounts. Registrations for early access to UPI AutoPay are open. If you wish to integrate UPI AutoPay on Subscriptions you can register with us here.
Conclusion
The UPI Autopay option in UPI apps truly acts like a cherry on top for digital payments. It adds value to the digital ecosystem by enhancing the overall experience of recurring payments for both users and merchants. By automating routine payments, UPI autopay simplifies management of funds while giving the users complete visibility, flexibility and control over their funds. The user decides when and how the autopay should be executed, and all of this can be revoked or paused as per the user’s choice.
Everyday money management is made easier, more organised, and less challenging with UPI Autopay on Cashfree Payments.
Frequently Asked Questions on UPI Autopay
- Is there a risk in autopay?
UPI autopay is only risky if your mandate is not set as per the due date or the frequency of deductions is incorrect. It is a low-risk payment method, as the consent and PIN authentication from a user are mandatory steps. A user can track the payment made, pause it or cancel it anytime from anywhere.
- Is setting up a UPI autopay a good idea?
Absolutely, UPI Autopay is a good idea because it saves time, prevents missed payments, and ensures timely bill payments without manual effort.
- How to set up a UPI autopay?
Enter the PIN to open the app. Once open, go to the auto mandates section and select ‘Approve a mandate request’. Verify the details of the mandate and enter your UPI PIN.
- What type of bills should be set on UPI autopay?
Bills that are to be paid, every year, every month or quarterly. Ideal for fixed bills based on internet services, subscriptions, EMIs, insurance premiums, and OTT platform payments.
- How can a business benefit from UPI autopay?
UPI autopay is extremely beneficial for businesses, as it improves timely collections, enhances cash flow, decreases operational work, and increases client retention.
