Fintech unicorn Paytm has announced a new feature to ease repeated and scheduled payments for its merchant partners. This is likely to help merchants make recurring payments for a wide range of services such as insurance companies, home loans and mutual funds investments
Consumers will have the option of choosing their preferred mode of payment like credit cards, debit cards, net banking, Paytm proprietary instruments and saved cards on Paytm for automatic billing based on frequency of their subscription.
Recurring billing makes the process of paying for goods convenient. The customer can consume services without having to worry about monthly bills for the services delivered.
Paytm’s new feature will also cover payment use cases such as content subscriptions, grocery purchases, membership fees for other online services etc.
“Frictionless recurring payments is a critical element of subscription businesses and with this feature on our payment gateway, merchants can now reach out to millions of users for their subscription offerings,” said Kiran Vasireddy, chief operating officer, Paytm.
The Noida-based company said that it processes more than 400 Mn transactions on its gateway business for its merchants.
Regulatory Issues Around Recurring Payments
Last week, The National Payments Corporation of India (NPCI) received approval from the Reserve Bank of India for implementing e-mandates for both internet banking and debit cards. This will allow users to issue standing instructions to automatically pay their recurring payments using NPCI’s instruments.
In its circular, NPCI has informed all the member banks to take immediate measure and implement both the variants within June 30. The limit for each mandate is set at INR 1 Lakh, and depending on the usage, the organisation will review the limit in due course.
Earlier, the process has traditionally involved paper forms and cheques under the RBI’s electronic clearing services (ECS) and the newer NACH (National Automated Clearing House).
Banks did provide a paperless eSign facility for mandates briefly, in May 2017, but the NPCI discontinued this shortly after the Supreme Court restricted the use of Aadhaar in September, 2018.