RBI Nods to Enhance UPI with Recurring Payments Feature

The Reserve Bank of India has finally given an e-mandate for recurring payments to be made through Unified Payments Interface (UPI). The move is expected to ease small digital payments made at local shops and grocery stores. 

The latest mandate makes it easier for users to make payments by skipping the additional factor authentication (AFA). This is applicable when you set up a one-time instruction on the UPI-service provider to skip the authentication process whenever you pay to a regular merchant.

The regulator stated that the guidelines applicable to recurring payments on the existing instruments would cover UPI payments as well. The maximum limit on recurring transactions is set at Rs.2,000. As per RBI’s guidelines, users must provide the merchant’s name, timeframe for recurring payments, and payment limit to initiate the facility. Users have the right to cancel the validity of the one-time instruction at any given point in time. 

Also Read: RBI Expands Coverage of BBPS over All Recurring Bill Payments

RBI elaborated that the cardholder will be given an option to set the instruction for either a pre-specified fixed amount for recurring transactions or a variable amount during the registration process. In the latter case, the cardholder must specify the maximum amount that can be transferred as part of the recurring transaction. This maximum amount must be set after considering the limit specified by RBI.

The RBI initially proposed the facility in November 2019 in addition to many other measures that concerned about widening the digital payments space of the country. The retail digital payments volume has reached a CAGR of 61%, and its value has reached 39% since 2015. There have been 131 crore UPI transactions, amounting to Rs.2 lakh crore, in December 2019.

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in