The Reserve Bank of India (RBI) has allowed customers to give e-mandate via Unified Payments Interface (UPI) to make recurring payments of up to Rs 2,000.
This will enable users of the platform to permit automatic deduction of funds from their bank account towards bill payments, subscriptions, SIPs, etc. and puts UPI at par with debit cards, credit cards and mobile wallets, which already allow fixed monthly payments.
"On a review of the developments since this facilitation, it has been decided to extend the above instructions to cover UPI transactions as well," said RBI's press release on Friday.
The functionality will help users of UPI to bypass the additional factor authentication (AFA) system (where you are required to enter a PIN) every time they initiate a payment.
The user will have to perform the AFA only once over the UPI platform to activate the recurring payment facility after providing the merchant's name and set a time frame and payment limit, as per RBI's guidelines. Further, this payment cannot exceed Rs 2,000.
These automated payments keep customers of various services from losing on their subscriptions due to non-payment and ensures timely payments to merchants.