82. Update — Recurring Payments
Earlier we covered ‘what’s new’ in the world of Cards (here), UPI (here) and Internationalisation (here).
Now, it’s the turn of ‘Recurring Payment Solutions’.
I am sure you have set up a mandate for periodic payment cases. I have few on Mutual Fund SIPs, Home loan and a OTT.
As you know, Recurring payment solutions allow a customer to register the mandate and the merchant can deduct funds from the customer’s payment instrument within the boundaries of the mandate.
We have quite a few recurring payment solutions:
a. eNACH (Read this Article): Works on bank account and a user can set-up eNACH via Debit Card, Net-Banking, Aadhar eSign authentication
b. SI on Cards (Read this Article): This solution went through entire overhaul in last 2 years with new guidelines and tokenization
c. UPI AutoPay (Read this article): Launched in GFF 2020; A user can set-up mandate on bank account via UPI
d. NACH (paper) (Read this Article): Paper based mandates that replaced earlier ECS.
Let’s start the updates related to ‘recurring payments’ space
A. SI on Cards
The last big update was increase in maximum debit amount from Rs.5,000 to Rs.15,000
B. NACH:
- Harmonisation of limits:
NPCI is increasing the limits for eSign (Aadhar) and eNACH. By 15th Sep 2023, all variants of NACH (digital and paper) will have the limit of Rs.1 crore per debit.
2. Simplified authentication mechanism for eNACH:
A user can set-up a mandate by completing either a successful transaction using a debit card or Net-banking or Aadhar e-Sign.
But the process is still tedious… who remembers net-banking passwords these days… right?
NPCI has further simplified the flow:
Maximum amount per debit is capped to Rs.15,000 for this flow.
Not bad… as most of our regular recurring payments (OTT, Mobile bills, utility bills) fit within this limit.
3. Image Quality Assurance (IQA) to standardise mandate images
What… Which images are you talking about?
As you are aware, in physical NACH, the image of the mandate form is sent for registration (not the actual paper).
IQA guidelines talk about standardising those images.
- Max allowed size of front image: 100,000 bytes
- Max allowed height and width: 2000 pixels
- Horizontal and vertical resolution: 60 DPIs (Min) and 500 DPIs (max)
- Image type should be same as extension — .tiff and .jpeg
- Luminance (measure of dark or light) of image: 0.6 (min) and 1 (max)
Any breach of the standard will be rejected with appropriate reason codes; deadline for implementation was 1st July 2023
4. Validity of Mandate for NACH (Paper)
Validity of a mandate will be 120 days (days = working days)
Meaning: Corporate/sponsor bank has to present the mandate (for registration) within 120 working days from the date the mandate is created or amended. Any mandate presented beyond the validity period will be rejected
Date of mandate should be less than present date; meaning post dated mandates are not allowed.
Note: Validity talks about registration step not the debit. A registered mandate can be debited after a year as well.
5. Restriction on number of representation:
A mandate that is rejected can be represented again. That is perfectly fine.
NPCI do not want to over use this representation feature so restricting how many times a mandate can be represented basis the reason for rejection
There are 44 reasons — too big for this article so read those in this circular here
6. NPS for eNACH
Sponsor banks to capture the feedback once they complete the mandate registration. It is mandatory — as soon as user completes the registration, a pop will come to capture the feedback (Circular)
NPCI wants to know the NPS (Net Promoter Score)
Note: NPS is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others
C. UPI AutoPay:
Good news… no major updates w.r.t. UPI AutoPay since last year.
But there is small update on One-time mandate on UPI:
Based on the user’s consent, a merchant can block the amount for up to 90 days; a merchant can debit or release the amount.
Used for IPO subscriptions (I have tried it on Zerodha) and also, available on IRCTC.
Note: This is similar to Auth and Capture (Pre-Auth) on cards
Last year, NPCI announced single block and multiple debits — where amount is blocked once but can be debited multiple times (as long the sum of partial debit <= block amount (or block period has not expired)
Interesting solution that can be used by radio cabs (block amount once and take multiple rides) and even for daily grocery delivery.
Product is yet to go live (at least I haven’t seen it in action).
That’s it for now…!
