With a view to deepening the digital payments ecosystem and as part of its efforts towards financial inclusion the Reserve Bank of India governor today announced extending the e-mandates framework to other recurring payments such as Fastag, which do not have a fixed periodicity and for UPI Lite.
Payments such as replenishment of balances in Fastag and National Common Mobility Card, which are recurring in nature, will be brought under the framework of e-mandates. These categories of payments are made as and when needed and, therefore, their replenishment is not time specific or amount specific. Bringing them under e-mandates framework will ensure that the balances in the wallets for such payments will be automatically refilled, when they fallvbelow a threshold amount set by the customer.
“This will enable customers to automatically replenish the balances in Fastag, NCMC, etc. if the balance goes below the threshold limit set by them,” RBI governor said in the monetary policy statement. “This will enhance convenience in making travel, mobility related payments.”
Detailed guidelines for this will be issued.
Under the current e-mandate framework there is a 24-hours cooling period before an actual debit from the customer’s account can be done. The RBI has proposed to exempt this requirement for payments made from customer’s account for automatic replenishment of balances in Fastag and NCMC, under the e-mandate framework.
UPI Lite was launched in 2022 to make it convenient for small value payments to be made through an on-device wallet. To encourage wider adoption of UPI Lite, the RBI has proposed to bring it under the e-mandate framework by introducing a facility for customers to automatically replenish their UPI Lite wallets if the balance goes below the threshold limit set by them.
This will further enhance the ease of making small value digital payments. UPI Lite sees about 10 million transactions monthly. “These measures will drive multi-fold growth in UPI led transactions” said Jose Thatiil, chief executive officer, Phi Commerce.” Ritesh Jain, Co-Founder of Flexiloans.com said that this facility would not only boost digital payments and reduce transaction costs, but also enhance operational efficiency and cash flow management for MSMEs.
The UPI Lite facility currently allows a customer to load the wallet upto ₹2000 and make payments up to ₹500 from the wallet. Since the funds remain with the customer, the requirement of additional authentication or pre-debit notification is proposed to be dispensed with.