What is UPI Mandate?

What is UPI Mandate?

10 November 2023

UPI has revolutionized the way we handle transactions. One of the standout features within the UPI ecosystem is the UPI Mandate. In this blog post, we'll unravel the significance of UPI Mandate, exploring what it entails, how it works, and the transformative impact it has on facilitating recurring transactions with ease.

What is UPI Mandate?

A UPI Mandate is essentially an instruction or authorization given by a user to a bank or financial institution to allow recurring transactions from their bank account. It empowers users to automate payments for a fixed amount on a regular basis, eliminating the need for manual intervention for each transaction. Users can leverage this service for various purposes, including bill payments, content subscriptions, and utility services.

The surge in subscription-based payments, fueled by the digitalization of bill payments, financial investments, and the rapid adoption of OTT platforms, prompted the introduction of recurring payment facilities. This feature has become particularly relevant in streamlining processes related to subscription-based services, bill payments, and various other recurring financial commitments.

Key Components of UPI Mandate:

- Authorization: Users authorize specific transactions by creating a UPI Mandate, giving consent for automatic deductions from their bank accounts.

- Frequency: Mandates can be set for recurring payments of various frequencies, such as daily, weekly, monthly, quarterly, half-yearly, or yearly.

- Amount: Users specify the fixed amount to be deducted for each transaction, providing clarity and control over their financial commitments.

How Does UPI Mandate Work?

To utilize these features, users need to provide one-time approval to merchants for whom they wish to automate payments. Details such as the subscription start date, merchant name, and debit frequency are essential when creating the subscription. The process involves choosing a subscription plan, approving a transaction through a UPI PIN (a one-time activity for authentication), and experiencing automated deductions without further user intervention. Customers retain the flexibility to revoke or pause mandates at any time via the UPI app, offering a versatile and user-centric approach to recurring payments.

Benefits of UPI Mandate:

- Easy Automation: Users can automate payments easily through their existing UPI accounts on UPI AutoPay-enabled apps.

- Flexible Recurring Payments: Users can set recurring payments ranging from Rs. 1 to Rs. 5,000, catering to a diverse range of financial transactions.

- Hassle-Free and Secure: UPI AutoPay provides a secure and hassle-free method for initiating recurring payments, eliminating the need for paperwork or documentation.

- Cashless and Digital: Facilitating cashless and digital payments, UPI AutoPay aligns with the ongoing trend towards a more digitized financial ecosystem.

- Timely Payments: Automated recurring payments reduce the risk of penalties and late fees, ensuring timely transactions—a critical aspect for both users and businesses.

- User Control: Customers can easily modify, pause, or revoke subscription plans at their convenience, offering them greater control over their financial commitments.

In a nutshell
In conclusion, UPI Mandate emerged as a powerful tool within the UPI ecosystem, reshaping the landscape of recurring transactions. Its ability to seamlessly automate payments while offering users control and security makes it a revolutionary feature.

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Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.