How UPI Autopay Can Strengthen EMI Payment Collection

About two years ago when NPCI enabled recurring payments on UPI, it solved a really big problem for companies that depend on the subscription model. It also came as a breather for lending companies as it simplified the collection of EMIs.

Making recurring payments have been a challenge for both consumers as well as companies.

More often than not consumers forget to pay for their subscriptions before the date of renewal and have to go through the hassle of re-subscribing to the product or service. Very often this involves paying a small fine as well.

The issue becomes graver when the payment has to be made for the house or vehicle loans as defaulting on EMI will affect customers’ credit scores.

With its convenience and robust security feature, UPI AutoPay is the best way to pay for EMIs.

What is UPI AutoPay?

UPI AutoPay allows users to set up an automatic debit of recurring payments from their UPI-linked bank account. Customers need to provide a one-time authorisation on their PSP app by entering their UPI PIN. 

Why UPI AutoPay is the simplest way to pay EMIs

While a number of sectors rely on recurring payments, the largest demand for such payments is seen in the digital lending and BFSI markets. Repayment of loans forms a very large chunk of the recurring payments space.

The current market size of digital lending in India is about $200 billion, according to a report by Statista. The same report said that the market is expected to grow to around $350 billion by 2023.

The volume of digital transactions over UPI surpassed the 6.5 billion mark in August this year. With the ease of payment that UPI offers, no other payment option has even come close to it in the past few years.

The indigenous payment option, UPI AutoPay has solved all the problems related to recurring payments. While various banks and PSPs facilitate such payments, Paytm Payment Gateway is the top player in India when it comes to acquiring UPI AutoPay payments for merchants.

Benefits of collecting recurring payments via UPI AutoPay on Paytm

UPI AutoPay is better on Paytm as it makes it simpler for users to create e-mandates and get started with auto-debit in no time.

Here are the five benefits of using UPI AutoPay on Paytm:

  • Convenience

The image of EMI payments till now has been that it involves a lot of paperwork and office visits. 

With UPI AutoPay customers don’t have to worry about lengthy paperwork and signing dozens of documents. Users simply have to create an e-mandate on Paytm, which gets activated immediately.

Once the mandate is activated, companies can start collecting recurring payments including EMI, insurance premiums, monthly SIPs, etc. The benefit for customers is that they don’t have to worry about setting up payment reminders or entering their UPI ID to make payments.

As more and more companies allow customers to pay via UPI AutoPay on Paytm, borrowers’ image of EMI payments will become better.

  • Robust security

UPI AutoPay is powered with top-notch security measures. Since most of the recurring payments such as home loans and insurance premiums are of bigger amounts, NPCI has enabled an additional factor authentication (AFA) via UPI PIN if customers are paying more than Rs 15,000.

  • Subscription link

Subscription links are the most convenient way to send reminders to customers. Paytm Subscription Link will have the amount to be paid, details of the product or service subscribed to, and all the payment options including UPI AutoPay.

Interesting Read: Automate Recurring Payments with Paytm Subscription Links

Customers can choose UPI AutoPay right from the Subscription link and complete the e-mandate process in just a couple of clicks.

  • No cancellation of e-mandate

Companies would benefit from the limitation on cancellations of UPI mandates. Customers are not allowed to cancel mandates for auto-debit made via UPI Autopay for EMI payments. Only after consent from the company can the borrowers cancel or modify their e-mandate.

How to enable UPI AutoPay with Paytm Subscriptions?

To pay via UPI AutoPay, the customer has to create an e-mandate that allows the business to auto-debit the amount from the user’s bank account.

Businesses can simplify the process of creating e-mandate for their customers by integrating Paytm Subscriptions on their websites.

Below we have explained how companies, as well as consumers can use UPI AutoPay with Paytm Subscriptions.

Here is how it works for consumers:

Step 1: The customer chooses the product it wants to buy on EMI

Step 2: Next, he or she sets up the payment interval and the amount to be paid

Step 3: The customer then chooses to pay via UPI AutoPay and provides the e-mandate to the company to deduct the amount periodically.

Step4: The customer makes the first payment by putting in his or her UPI PIN. This is a one-time activity that authenticates the transaction.

Step 5: Recurring payments are deducted in a completely automated manner not requiring any further action from the customer

Here is how it works for businesses:

Companies that are already leveraging Paytm Subscriptions to collect recurring payments can enable UPI AutoPay using simple API integration.

Once Paytm Subscription is enabled on the company’s website or app, they need to follow these instructions:

  • Create subscription

The first step is to create payment plans for the product or service. UPI AutoPay works for subscription-led products as well as products that customers want to purchase on EMI.

The payment plan should include intervals at which the customer has to pay, the amount to be paid, the start and end date of the EMI, and the payment mode.

  •  Activate Subscription

Once the customer chooses the desired payment plan and UPI AutoPay as the payment method, Paytm will ask the customer to give a one-time consent to make the first payment.

The customer will also have to give consent to make all future payments automatically from the selected payment instrument as per the subscription plan specified while creating the subscription plan.

Interesting Read: Paytm Subscriptions 2.0: Enable Recurring Payments with UPI AutoPay

The subscription plan and the payment method will get activated as soon as the first payment goes through. From thereon, customers don’t need to manually make payments.

Companies can start deducting the EMI amount mandated by the customer at a fixed interval without any intervention from the customer.

  • Collect Payments

In case, the payment amount is more than Rs 15,000 the company will have to collect an additional authorisation from the customer as an OTP. Once the customer confirms the OTP, the money will get auto-debited from the customer’s account.

Frequently Asked Questions

Question: What are UPI Intent, UPI InApp, and UPI Collect?

Answer: These are different payment flow methods that businesses can offer their customers via Paytm Subscriptions.

UPI Intent allows customers to pay using any of the UPI apps that are on their smartphones.

UPI InApp flow is also known as UPI Push. It is one of the most advanced UPI flows through which you can display the UPI associated bank account of the user on your app itself. Once the user selects the same to make payment, Paytm App MPIN page opens up directly over your app. The flow is supported with both All-in-One SDK and Custom UI SDK integrations.

UPI Collect gives customers the option to pay directly by entering their VPA (virtual payment address) and authenticating the transaction from their UPI PSP app.

Question: What is the limit of e-mandates from one bank account?

Answer: As of now there is no limit set by the Reserve Bank of India for creating e-mandates.

Question: What happens if the EMI amount is more than Rs 15,000?

Answer: Customers will have to provide an additional authentication by punching in their UPI PIN.

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