UPI FAQs

UPI AutoPay on Recurly is a feature specifically designed to handle recurring payments in India, leveraging the country's Unified Payments Interface (UPI) system. It allows businesses to offer a seamless and compliant subscription experience to their customers. The process works by creating a "mandate" that pre-authorizes recurring payments.

What is UPI AutoPay?

UPI AutoPay is a feature that allows users to set up recurring payments on the Unified Payments Interface (UPI). Instead of manually approving every single transaction, you can create an automated, recurring payment for things like streaming subscriptions, utility bills, or mobile recharges. It is designed to simplify and automate regular transactions.

How does it work?

The process is managed through a mandate. A mandate is an instruction you give your bank to authorize a specific merchant to deduct a certain amount of money from your account at regular intervals. You only need to authenticate this mandate once using your UPI PIN.

Here's the step-by-step process:

1. Mandate Creation: The merchant (e.g., your streaming service) sends a request to the user's UPI ID to set up an AutoPay for a specific amount and frequency.
2. User Authentication: You receive a notification on your device and review the mandate details, including the merchant name, amount, frequency, and duration.
3. PIN Authorization: If you agree to the terms, you authorize the mandate by entering your UPI PIN. This one-time authentication is what allows future, recurring payments to be processed without your PIN.
4. Recurring Payments: On the scheduled payment dates, the amount is automatically deducted from your bank account and transferred to the merchant. You will receive a notification for each successful transaction. In certain circumstances, you may need to authorize the transaction if it is over a certain amount.

What is a mandate?

A mandate is a recurring payment instruction that you authorize. It specifies the key terms of the AutoPay, including:

• Maximum amount: The highest amount that can be deducted per transaction.
• Frequency: How often the payment occurs (e.g., weekly, monthly, quarterly).
• Start and End Date: The duration of the recurring payments.
• Merchant: The recipient of the funds.

For transactions exceeding ₹15,000, a "block and hold" feature is used. The bank blocks the payment amount in your account, but it is only debited upon your final, one-time approval.

Why is UPI so restrictive?

UPI is a public utility built and regulated by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI). The platform's restrictiveness is a deliberate design choice to ensure security and consumer protection.

• Security: By requiring a UPI PIN for every manual transaction, the system ensures that only the account holder can authorize a payment. This prevents fraudulent access and unauthorized deductions.
• Dispute Resolution: The strict rules and regulations create a clear audit trail for every transaction, making it easier to resolve disputes between merchants and customers.
• Standardization: The restrictions ensure that all banks, third-party apps, and merchants operate on the same set of rules, creating a uniform and reliable payments ecosystem.

Who is RBI?

The Reserve Bank of India (RBI) is India's central bank and the primary regulator of its banking and financial systems. Its primary objective is not to facilitate convenience at all costs, but to ensure stability, security, and integrity of the entire financial system.

• Protecting Consumers: The RBI's stringent regulations, such as those governing UPI AutoPay, are designed to protect consumers from fraud, overcharging, and deceptive practices.
• Maintaining Financial Stability: By overseeing the digital payments landscape, the RBI ensures that the system is resilient and reliable, which is crucial for the nation's economic stability.
• Enforcing Compliance: The RBI mandates that all financial institutions and payment service providers adhere to strict compliance standards, which can sometimes be seen as a burden, but is essential for preventing systemic risks.