What is UPI Autopay

UPI AutoPay simplifies your life by effortlessly managing recurring payments. Introduced by NPCI, this innovative solution focuses on enhancing convenience and providing greater control over your financial transactions.

The Unified Payments Interface (UPI) is a real-time payment system created by the National Payments Corporation of India (NPCI). It facilitates immediate money transfers between bank accounts via smartphones, positioning India as a global frontrunner in digital transactions.

Table of Contents

• What is UPI AutoPay

• Features of UPI AutoPay 

• How UPI AutoPay Works

• Benefits of UPI Autopay

• Why is UPI AutoPay Important 

• Sectors Utilizing UPI AutoPay

• Setting Up UPI AutoPay

• Security Aspects of UPI AutoPay

• Challenges and Limitations

• The Future of UPI AutoPay

• Conclusion

• FAQs

What is UPI AutoPay? 

UPI AutoPay is an enhancement of the Unified Payments Interface (UPI) that enables users to automate regular payments such as subscriptions, utility bills, loan equated monthly installments (EMIs), and insurance premiums. Introduced in July 2020, it was developed by the National Payments Corporation of India (NPCI) in response to the increasing demand for a dependable recurring payment solution following the Reserve Bank of India's (RBI) stricter regulations on card-based auto-debit mandates.

Features of UPI AutoPay

• Smooth Transactions: By automating repetitive transactions, UPI AutoPay ensures prompt settlements without the need for human interaction, streamlining the payment process. 

• Security: The function is based on strong security protocols and adheres to strict authentication procedures to safeguard your financial information.

• Convenience: It saves time and effort by doing away with the necessity of manually initiating payments each time. 

• Flexibility: With UPI AutoPay, customers can establish mandates for a variety of services, such as insurance premiums, utility bills, subscriptions, loan EMIs, and more. 

• Cost-Effectiveness: By lowering the possibility of missing payments, automated payments may help you avoid late fines and penalties.

How UPI AutoPay Works

Let’s break down the flow:

• Mandate Creation: You authorize a recurring payment by setting up a mandate through a UPI app.

• Approval: The mandate is approved using the UPI PIN.

• Automated Execution: The amount is auto-debited on the scheduled date.

• Alerts & Notifications: You get timely alerts before every deduction.

Benefits of UPI AutoPay

For Consumers

• Eliminate due date anxiety: Set it up once and forget about it.

• Complete control: Pause, resume, or cancel at any time

• Instant notifications: Receive alerts before each transaction.

• No charges: It is free for the majority of users.

For Merchants and Businesses

• Quicker payment collection

• Better cash flow and customer retention

• Reduced payment failures in comparison to card transactions

• Improved customer satisfaction

Why is UPI AutoPay Important

• Leverage Non-revocable Mandate: Vital in the BFSI industry, it prevents customers from canceling recurring loan or EMI payments, reducing the risk of defaults and ensuring timely, consistent payments for businesses.
• Increased Revenue Return Rates: Businesses receive their payments on time with UPI AutoPay, which means better, more predictable, and manageable cash flow. Customers also don't miss payments, so there's more money coming in. 
• Process Faster & Secure Transactions: Payments are processed quickly, and since it’s all through UPI, it’s safe and keeps your money secure. No need to worry about long waits or potential risks.
• Maximize Redemption Success Rate: UPI AutoPay helps businesses minimize losses and increase the chances of successfully processing payments.

Sectors Utilizing UPI AutoPay

• Streaming Services

Platforms such as Netflix, Amazon Prime, and Hotstar have adopted this feature. AutoPay guarantees seamless viewing experiences without interruptions.

• Insurance and Investment Funds

Whether it's monthly SIPs or insurance premiums, AutoPay ensures timely payments without fail.

• Utility and Telecommunications Payments

You don't need to log in each month to pay your electricity, water, and phone bills. Simply set it up and let it run automatically.

• Fitness and Educational Subscriptions

From gyms to fitness applications and online learning platforms, AutoPay streamlines the process of recurring payments.

Related article: Recurring Bill

Setting Up UPI AutoPay

Step-by-Step Guide for Consumers

• Open any UPI app (like Google Pay or Paytm).

• Choose the service/subscription you want to auto-pay.

• Select “UPI AutoPay” as the payment option.

• Set the amount, frequency (daily/weekly/monthly), and duration.

• Approve the mandate using UPI PIN.

  • Related article: Business Banking and UPI API Solutions

Security Aspects of UPI AutoPay

• Two-Factor Authentication: Mandates are confirmed using a UPI PIN. 
• Encrypted Transactions: All information is secured with bank-level encryption standards. 
• User Control: Users can revoke any mandate independently of the merchant.

Challenges and Limitations

• Digital Literacy: Many users remain unaware of the AutoPay feature. 
• Elderly Individuals: They tend to favor conventional payment methods. 
• Application Compatibility: Not all merchants or applications currently offer support for this feature.

The Future of UPI AutoPay

• Global Expansion: Potential use in cross-border payments.
• Wider Adoption: By government services, schools, and hospitals.
• Smarter Features: AI-based mandate recommendations, budget reminders.

Conclusion: UPI AutoPay 

UPI AutoPay is revolutionizing the management of recurring payments for individuals in India. From monthly OTT subscriptions and SIP investments to gym memberships and utility bills, UPI AutoPay offers unparalleled convenience and oversight. By simply tapping a few buttons on your UPI application, you can establish a secure and automated payment schedule, thereby reducing the likelihood of late payments, penalties, or missed renewals.

FAQs: UPI AutoPay 

What is autopay in UPI?

UPI AutoPay is a functionality that facilitates the automation of recurring payments through the Unified Payments Interface (UPI) system. This feature allows users to establish recurring e-mandates for a variety of services, including mobile bills, electricity bills, EMI payments, subscriptions, and others, thereby ensuring that payments are processed automatically without the need for manual intervention on each occasion.

How do I remove autopay from UPI?

To eliminate an autopay mandate from your UPI, you must cancel it via your UPI application (such as Google Pay, PhonePe, or Paytm) or through your bank's mobile application. This process requires you to access your payment settings, locate the 'Autopay' or 'Mandate' section, choose the specific mandate you wish to cancel, and confirm the cancellation, typically by entering your UPI PIN.

Is it safe to use autopay?

Yes, UPI AutoPay is a safe and reliable payment option

What is the limit of UPI autopay?

UPI AutoPay enables automatic payments with a default cap of 15,000 per transaction. Nevertheless, this threshold can be raised to 1,00,000 for designated categories such as mutual fund subscriptions, insurance premiums, and credit card bill payments, as stipulated by NPCI and RBI. For transactions surpassing these adjusted limits, an Additional Factor of Authentication (AFA), such as a UPI PIN, may be necessary. 

What happens in autopay?

The Autopay feature enables the bank to automatically withdraw funds from your account to settle bills. This service is offered for specific billers who provide the bank with information regarding outstanding bills for online viewing and payment. When you register a new biller for online bill payment, you have the option to configure the Autopay settings.