In 2017, NPCI announced UPI 2.0 which had a couple of updates like:

• Linking overdraft account (other than current/ savings accounts) on UPI instantly

  The overdraft allows the customer to complete payments even when there is insufficient money. It is like any other loan: The account holder pays high interest and fees on it.

• One-time mandate

  With this feature you can pre-authorise (Mandate) a transaction, for debit from your bank account later. UPI mandate is to be used in scenarios where money is to be transferred later, however the commitment is to be done now. Eg: IPO subscription, security deposits

• Invoice in the inbox

  This feature enables you to check the invoice being paid via a link and thereby verify the details of the transaction before you pay.

• Signed intent and QR

  This feature is designed for customers to check the authenticity of merchants while scanning QR code. It notifies the user whether the merchant is verified UPI merchant or not. It also negates the chances of QR tampering.

One-time mandate wasn't sufficient

With the growing popularity of UPI, people expected it to provide a solution for seamless recurring payments. One-time UPI mandate had very limited use cases (IPO, refundable deposits) as compared to recurring ones (subscriptions, SIPs, EMIs). Hence, NPCI announced the launch of AutoPay on the first day of Global FinTech Festival, 2020.

Highlights of AutoPay

We will discuss in depth about the basics of Recurring payments in the next essay. Until then let's quickly highlight the characteristics of AutoPay:

1. You can set mandate parameters on the merchant or UPI app (start-end date, frequency, amount type or limit)
2. Merchant can initiate mandate registration and consumer can approve it on the UPI app. Mandates can be both P2M (EMIs) or P2P (monthly salary to staff). Both of them can be user initiated and have associated risks (like random cancellations).
3. Merchant should send a debit notification 24 hrs prior to debit.
4. Only end date, amount and debit account can be modified in a mandate. Incase you want to change other parameters, you can cancel and re-register for a new mandate.
5. Mandates can be put to hold or cancelled by merchant or consumer.

Last essay Day 14: UPI, other flows

Next essay Day 16: Juspay's Blog on Tokenization