The Unified Payments Interface’s (UPI’s) AutoPay feature, which enables customers to set up recurring e-mandates using any UPI application, has seen massive traction since the Reserve Bank of India’s (RBI’s) new rules on standing instructions for recurring payments on cards kicked in from October last year.
In December alone, the volume of mandates registered by remitter banks on UPI’s AutoPay feature touched 6 million, up 32 per cent from the previous month, revealed the data released by the National Payments Corporation of India (NPCI) — the umbrella organisation for digital payments in the country.
In November, remitter banks registered around 4.55 million mandates, while in October, it was 4.03 million. Since October, more than 14.5 million mandates have been created on the platform.
State Bank of India, HDFC Bank, and Bank of Baroda are the top three banks in terms of registration of mandates in December, with 1.82 million, 574,841, and 435,450 mandates, respectively. In September, remitter banks registered 3.14 million mandates on the platform. In August, 1.77 million AutoPay mandates were registered.
“This growth is very organic. There is a target of reaching 25 million new mandates per month in the next year or so. It will become a good growth driver and will give compounding value,” said a source aware of the development.
“If every month, more and more mandates are added, consequently they will increase the number of transactions as well. Large music merchants and over-the-top (OTT) players are getting onboard and within six months, almost all the large merchants will get onboarded. However, international merchants may take some time to get onboarded,” added a source.
Mandate registration refers to the transaction wherein a consumer creates a recurring mandate against the consumer account for payments which are recurring in nature. Launched last year, the UPI AutoPay allows customers to set up recurring e-mandates for up to Rs 5,000.
UPI AutoPay has come into prominence in the backdrop of a disruption witnessed in the recurring payments space after the RBI’s new guidelines which mandated prior consent of a customer before debiting his/her account.
“Making UPI AutoPay a success remains a priority,”said Praveena Rai, chief operating officer, NPCI, to a television channel.
“We closed the year on a very good note. The cumulative mandates on UPI AutoPay are also looking very good. But I am more excited about the merchants who have come on board with different kinds of services. OTT players like Netflix, Hotstar, streaming music players like JioSaavn, Gaana, and many others, are in the top category. The other top categories are recharge and charity,” she said.
According to the NPCI website, merchants such as Netflix, Disney+ Hotstar, JioSaavn, Bennett, Coleman and Company, PolicyBazaar Insurance Broking, Goonj, HelpAge India, and others are live on UPI AutoPay.
The AutoPay platform of UPI is also being touted as the pillar for its next phase of growth. Experts in the past have said AutoPay will serve as the big use-case to fuel the next level of growth in UPI, which has seen stellar growth in the calendar year 2021 (CY21).
In CY21, UPI processed more than 38 billion transactions, amounting to Rs 71.59 trillion. In 2021-22 so far, it has processed more than 31 billion transactions, surpassing the transactions processed in 2020-21.
“The recurring payment disruption is still stabilising, even though more than three months have elapsed. The disruption led to many consumers moving to UPI AutoPay because the process is simpler and faster. It is expected to grow on the debit standing instructions mandate side where the amount is deducted from the bank accounts of customers but not so much on the credit side,” said Vishwas Patel, executive director, Infibeam Avenues.