You can soon port AutoPay mandates across UPI apps
What's the story
The National Payments Corporation of India (NPCI) is planning to make UPI AutoPay interoperable. This will allow users to port their mandates across different UPI apps, and merchants to transfer existing mandates from one payment gateway to another. The move is expected to ease the recurring-payments market by reducing two types of lock-ins. Currently, consumers have to cancel and recreate subscriptions, insurance premiums or loan repayments when switching between UPI apps.
User benefits
Cross-app view of mandates
The interoperability feature could also provide a cross-app view of mandates, making it easier for users to track upcoming debits, account balances, and forgotten subscriptions.
However, it's important to note that mandates linked to different customer bank accounts will continue to be debited from the account originally authorized by the user.
The change also allows eligible mandates to be accessed across UPI apps.
Market expansion
Growth of recurring payments
Launched in 2020, NPCI's UPI AutoPay enables businesses to automatically debit a customer's bank account at fixed intervals for various services.
The move comes as the scale of recurring payments has grown sharply, with top 10 banks processing nearly 1.8 billion UPI e-mandate transactions in July.
The interoperability push is partly driven by smaller UPI apps that see AutoPay as a tool that keeps customers captive to larger rivals.
Merchant advantage
Benefits for merchants
For merchants, interoperability means their existing base of mandates becomes portable.
Currently, a subscription business that switches payment gateways can only route new customers through the new partner, while older mandates remain with the original provider.
With interoperability, even existing mandates can be executed on new platforms.
This change is expected to make it easier for businesses to switch payment gateways without losing their existing customer base.