Now, you will be able to issue standing instruction to your UPI-enabled digital wallet operator to debit your account for recurring bill payments through the UPI platform. The Reserve Bank of India,the country’s banking regulator allowed payments processors to debit accounts through UPI based on a mandate provided by the customer, the Times of India said in a report.
However, there is a limit on payments made through this facility. The maximum amount that can be paid through this method is Rs 2,000.
According to the daily, in a communication to the National Payments Corporation of India, the RBI said that the facility that the central bank had allowed for processing of e-mandate on cards for recurring transactions without second-factor authentication by the customer for subsequent payments would be extended to UPI. What this means is that the customer has to one-time authenticate his account through a one-time password or a PIN, and subsequent monthly payments would be debited automatically.
“Keeping in view the changing payment needs and the requirement to balance the safety and security of card transactions with customer convenience, it has been decided to permit processing of e-mandate for recurring transactions (merchant payments),” the RBI said in a notification.
Earlier, this facility was available on bank accounts, debit, credit and prepaid cards only.
Experts say the recent move by RBI will push digitisation and reduce the need for cards issued by payments networks. According to bankers, merchants and utility companies will find it beneficial to ask customers to provide a mandate through UPI as the government has banned any merchant fee on UPI.