RBI Allows UPI Transactions For Recurring Payments
The Reserve Bank of India on Friday said it is allowing recurring payments through electronic mandates on the unified payments interface. The regulator has allowed transactions worth up to Rs 2,000 to be carried out under this mode.
The recurring payments feature was first allowed for debit cards, credit cards and prepaid payments instruments in August 2019. The National Payments Corporation of India Ltd. had proposed recurring payments for UPI transactions while launching the enhanced version of the interface in August 2018, but it was soon withdrawn. The regulator has now given it the green signal.
The move is likely to make signing up for financial services, such as systematic investment plans and insurance, easier for customers. It will also help in making UPI a means for payment for utility bills up to a certain limit. Subscription driven businesses and cab aggregators, too, can use the recurring payments facility on UPI now.
The payment feature will be available for customers to opt in through a one-time registration process, where an additional factor authentication would be used. Using this, the customer can allow e-mandates for transactions where they would like to allow merchants to receive payments at regular intervals.
The service provider would have to provide a pre-transaction notification to the customer at least 24 hours before the scheduled transaction, RBI had said in its August 2019 notification. Similarly, the service provider will also provide a notification to the customer immediately after the transaction. An easy opt-out facility and a grievance redressal mechanism with clearly defined timelines will also be provided to the customer by the service provider, it had said.
The RBI communication said that all norms applicable for credit/debit cards and prepaid instruments offering recurring payments would be applicable for UPI transactions as well.
The regulator’s guidelines on reducing customer liability through fraudulent online transactions would be applicable on these customers as well. It shall be the responsibility of acquirers to ensure compliance by merchants on-boarded by them, RBI had said.
Recurring transactions will be an additional boost to UPI, which has seen a surge in usage. In December, transactions worth Rs 2 lakh crore were carried out on the UPI platform. Private service providers such as Google Pay, PhonePe and Paytm led the charts as far as UPI transactions go.