You are a great fan of chocolates, and you decide to buy chocolates every week from a particular store. Luckily, you found an online store that is ready to deliver your choice of chocolates at your doorstep. All you need to do is to check the recurring payment option and initiate the first purchase. After this, every week, the amount will be deducted from your bank account and the chocolates will be delivered without your intervention.
This cycle will go on until you wish to cancel the subscription. Interesting, isn’t it?
Recurring payments are a great option; people have been using it for many years now. Earlier, these recurring payments were allowed only through debit cards, credit cards, and prepaid payment instruments until August 2019. In the same month, The National Payments Corporation of India Ltd. launched an enhanced version of its UPI interface and proposed recurring payments through UPI transactions. Unfortunately, the idea went for a toss by the regulator. Surprisingly, the year 2020 brought good news as the regulator approved the idea.
RBI issued a mandate on 10th January 2020 and allowed recurring payments via electronic mandates on the unified payments interface. The transactions allowed on such an interface is up to INR 2,000. This move has come with its own advantages and benefits. We have rounded up the prominent ones here:
#1. As this proposal has been approved by the regulator, individuals can sign up for financial services such as systematic investment plans (SIPs), insurance, etc. much easier.
#2. With this move, paying utility bills up to a certain amount has become very easy for citizens.
#3. This facility has been exploited by subscription-driven businesses and cab aggregators as they can cut the amount directly from the UPI of their customers.
#4. It has even eased out small payments made at the grocery, medical and local stores.
This functionality is very useful, as it has helped the UPI users to bypass the additional factor authentication every time at the time of payment. The users can give one-time instructions and intimations about the payment to the UPI service provider and there they go.
This approval has facilitated a better passage for digital payments as the process is easier. Out of all the benefits, the systematic investment plans (SIPs) will enjoy huge benefits. This feature is going to allow the customers to set up repeated transactions with the help of their UPI applications. Hence, UPI has somehow bolstered the digital payment and pushed more people to use it.
We believe video streaming and subscription platforms such as Amazon Prime, Netflix and so on are going to have a good time here. The users can add recurring payment options with their subscribers and enjoy hassle-free streaming until they choose to end their subscription on their own.
It is a good move and investing with this UPI will become easier. People are more encouraged to depend upon digital payments and UPI are the easiest form of digital payments very well controlled from your smartphone.
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