The Rise of UPI-Autopay

This new feature makes it easier than ever to pay your bills and subscriptions on time, and it could revolutionize the way we make recurring payments.

Do you remember some time ago when all the subscription-based services such as Netflix and Amazon informed you that you would have to re-enter your card details per RBI’s new guidelines in India?

It looked something similar to below

And mind you this was not optional. The websites were to forget the details of the card, if the details were not re-entered and saved as per new RBI guidelines.

You must be wondering why was this done.

In short, The Reserve Bank of India(RBI) imposed these norms to protect consumers against unrequired recurring payments being set up on their cards. This was done following multiple instances of auto-debit transactions being executed without the customer’s initiation or consent.

So in summary, the RBI came with these guidelines

Registration of the card on the subscription needs to be done with 2-factor authentication.

A notification is to be sent to the user, 24 hours before the debit is going to happen.

In case the debit’s value is over Rs. 5000, then 2-factor authentication is to be done again at the time of debit.

And lo and behold, the scene was perfectly set for the rise of UPI to grab at this opportunity. UPI-Autopay was introduced to the Indian Market as a tool in March 2020. These norms by RBI had a deadline to be completed by all parties by October 2021.

The companies saw it fit to introduce UPI Autopay as another tool for consumers to pay for their subscription-based commodities. The biggest advantage being UPI experience is almost seamless and with so less friction the subscription is easier to do with a UPI than a credit card or debit card.

What is UPI Autopay?

UPI AutoPay stands for UPI Automatic Payment. duh!

• It enables the user to schedule fixed monthly payments like subscriptions, utility services, etc.
• The said amount will be automatically deducted from the user’s bank account on the date set by the user and the payment will be made. This is essentially how a mandate works.
• This recurring payment facility allows users to enjoy a seamless payment experience and also enables them to save payment receipts.

UPI Autopay is built upon the UPI stack. Unified Payment Interface ( UPI) is basically a platform that allows users to transfer money from their bank accounts instantly. The user can use this feature through a smartphone. The UPI application works on a single interface infrastructure, because of this it is inter-connected across multiple banks in India. The system on which UPI functions is known as the Immediate Payments System ( IMPS).

How has UPI Autopay been doing in the market?

When the new rules came into play, it gave a very concrete opportunity for the companies to try out the UPI Autopay.

And why not since, the user journey is so simple. All the consumer needs to remember is what their UPI ID is and the rest is just accepting the creation of the mandate. That is all.

The new guidelines for auto debit on credit cards and debit cards were to be completely in force by Oct 1, 2021. And the companies migrated to UPI Autopay while adhering to the new guidelines.

The data shows that the number of mandate registrations doubled from Aug’21-Oct’21 to Nov’21-Jan’22. That is an increase of 100% over a quarter. UPI-Autopay grabbed the opportunity amazingly.

In the first year of its launch, it processed over 10 billion transactions worth ₹1 trillion. As of March 2023, there are over 100 million active UPI Autopay mandates in India.

This is the number of mandate registration attempted. (The number of mandates executed will stack up every quarter till the closing date of the mandate)

Is the user journey that simple on UPI Autopay?

Let me show you the user journey by doing a case study of the app ZapMoney. ZapMoney is a digital lending platform that uses the UPI Autopay feature to make the repayment of loans easier for their consumers.

The user after getting approved of a loan request, has to complete their mandate creation for the auto repayment of the loan every month. To complete the mandate creation through UPI, they have to choose a date when they want the debit to happen every month.

The steps involved in the journey are as follows:

1. The customer chooses the date of the debit. This will be the date on which every month, the debit occurs (P.S. ZapMoney requires to ask for the date, since they want the customer to decide their loan repayment date. In any other consumer subscription, this date becomes the present date or the date after the trial period)
2. The customer inputs their UPI ID.
3. The customer is shown the details of the mandate and then the mandate is requested.
4. The customer goes to their UPI app provider such as Google Pay, or PhonePe or Paytm, etc.
5. They approve the mandate with their UPI pin and the process is done.

These steps make it extremely easy to register a mandate which can take care of the planned auto debits. No more remembering to pay the EMI on time.

But this was about a Loan Repayment, what are the other use cases?

Use Cases of UPI Auto-Pay

📰 Media Services — Different plans can be subscribed over UPI recurring payments. Newspaper, Magazines, Spotify, Netflix, the service is amazing for all of them. (P.S. Netflix is currently using this system in India)

💺Transit — Daily/ Weekly/ Monthly all types of can passes available through UPI.

🏬Ecommerce — Modify/ Revoke/ Pause features also available for changing the orders placed as and when required.

📄Insurance Subscription — Just start Autopay for insurance and never miss a premium.

Right now Google Play Store and Apple store are also live on the system.

Have a look of how the subscription to an Apple App could look like:

And you as a consumer gets the option to pause the debit too. Don’t want the service for that month, pause it. Want to cancel the subscription altogether, Cancel the Autopay.

No need to write Emails to the company to cancel your subscription or finding the cancel button on the app.

UPI Autopay gives the power to choose their subscription as they please back to consumers in a very easy fashion.

But so do the other mandates such as Credit Card Mandate and Net banking Mandate. So what is the difference?

UPI AutoPay vs. Other Recurring Payment Methods

Let us see the difference between the other recurring payment Methods vs what UPI Autopay has to offer:

Credit card and Debit card recurring transactions give the same offer as UPI Autopay. The only difference is that you will have to whip out your credit card to punch in the numbers, whereas UPI Autopay is just remembering your UPI Id.

Considering the new generation is completely one with the UPI ecosystem, it is absolutely seamless and easy to do for them.

And for businesses too! yes , it is extremely easy for the business to incorporate this tool in their stack to create mandates and charge for their subscriptions.

Conclusion

UPI AutoPay is a simple, convenient, and secure payment solution that allows customers to set up automatic payments for recurring bills. It is backed by a powerful subscription solution that offers a wide range of features, including the ability to customize payment options, set up recurring payments, and manage your subscriptions.

It offers:

• Convenience: UPI AutoPay allows you to set up automatic payments for your recurring bills, so you don’t have to remember to send payments each month.
• Security: Your payment information is protected by industry-standard security measures.
• Savings: You can often save money by taking advantage of discounts that are offered for automatic payments.

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Until Next Time!

Originally published at https://productsunboxed.substack.com.