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When UPI AutoPay first came into the picture back in July 2020, most businesses embraced it with open arms.
After all, UPI had emerged as the most popular mode of payment amongst customers. Accepting recurring payments through UPI AutoPay made absolute sense. Needless to say, the popularity has only increased since then.
However, with increased preference for UPI, came new regulations and functionalities.
For instance, A new feature release in December 2022 allowed merchants to accept multiple recurring payments up to a permitted amount. Until now, they could only make a single debit to receive payment.
With all these new developments, we, at Cashfree Payments, hosted a roundtable with industry leaders to discuss how businesses can leverage UPI AutoPay to expand their subscription businesses and offer recurring payments to the larger mass. Our experts included:
- Umang Singh Chauhan from National Payments Corporation Of India (NPCI)
- Akshat Praneet from Jar
- Samir Gupta from Cashfree Payments
Why has UPI seen such tremendous growth especially for recurring business transactions?
While UPI started as a P2P-centric payments infrastructure, it was the steps taken by ecosystem players like fintechs and banks that made it popular for business payments. The robust acceptance as well as issuance infrastructure has been the reason behind this growth.
In fact, out of the 7 billion monthly transactions, P2M transactions make up for almost half of the entire chunk.
Here, credit is due to governmental players like NPCI as they have helped create a freiction-free ecosystem for these players to collaborate seamlessly.
How does the mass adoption of UPI affect fintech players and their customers?
UPI has been a great equalizer in terms of opportunities it provides to fintechs and startups.
Historically, financial services like credit card payments, investments and savings were only accessible to a certain sections of the society. In fact, complex payments infrastructures acted as gatekeepers against a better part of the population.
UPI, with its user-friendly and simplistic interface has helped breakdown barriers and promote financial inclusion.
What was the thought process for NPCI to develop UPI AutoPay?
First and foremost, there was a huge demand for a user-friendly recurring payments infrastructure.
Before UPI AutoPay, businesses were using e-mandates and Standing instruction on cards. However, there was a huge gap in the market for a infrastructure that could help with:
- Single or multiple recurring debits
- Penalties in case of late payments
- Higher customer convenience
UPI had already proven to be popular amongst the masses. So, this is where NPCI identified the opportunity to extend the UPI infrastructure’s functionalities to recurring payments use cases as well.
What are the top USPs and benefits of using UPI AutoPay?
Some of the top UPI AutoPay benefits can be the ease of:
- Use for customers and businesses alike
- Onboarding customers
- Modifying or cancelling mandates
- Using any UPI app for mandate authorization
Moreover, moving to digital payments translates into less paperwork and operational or manual hazards. This, in itself, helps businesses reduce their losses.
What are the popular use cases for UPI AutoPay?
Some of the most popular use cases involve loan repayments (lending), OTT subscriptions, utility bill payments, investments and insurance renewals.
However, NPCI is now exploring newer use cases like:
- monthly grocery transactions
- society vendor aggregators (like vegetable hawkers and newspaper subscriptions.)
- subscription to foreign media (Wall street Journal, The Times, etc.)
Recently, NPCI announced a higher limit on UPI AutoPay transaction value. How does this increase in limit help businesses?
There is a limit of upto Rs.15,000 for debits not requiring UPI PIN for the transaction.
The most noticeable change with the upping of the recurring payment limit is that businesses can cater to newer use cases and broader customer segments.
For instance, when it comes to goal-based savings, customers might want to set up a higher limit for the debits (like buying a new car).
One of the top USPs of UPI AutoPay is the ability to customise mandates. What were the pros and cons of the same?
The mandate customization was actually a double-edged sword due to the varied use cases. While pausing a OTT subscription makes sense for a customer, the same cannot be said for mandated loan premiums.
In order to solve this conundrum, NPCI introduced non-revocable mandates that enabled merchants with the ability to reject their customer’s request to pause/cancel these mandates. This change came as a blessing for lending merchants who were looking to cut down on loan defaults from their customers.
What were the other noteworthy UPI features in 2022?
Some major milestones are:
- Credit card linkages to UPI- currently active with a few select banks
- UPI Autopay linkages with BBPS systems
- Increase in UPI Autopay limit to 15000
If the recent success of UPI AutoPay is any proof, this payment infrastructure is only going to grow. As the use cases continue to expand into new industries, it will be interesting to witness the new features accompanying new requirements.
Are you a business looking to collect UPI recurring payments? Let our payments experts help you out!
