Today, customers increasingly seek access to trusted products and services on an ongoing basis. Subscription-based models meet this demand by providing affordable, continuous access, ensuring uninterrupted services.
As of February 2024, India’s telecom subscriber base grew by 0.38% to 1.197 billion in just one month. Additionally, Deloitte’s GACS 2024 poll revealed that 67% of Gen Z consumers are inclined to shift from car ownership to a car subscription model.
To thrive, subscription businesses must offer a seamless payment experience that allows customers to renew without hassle. In this blog, we explore UPI Autopay, a tool designed to facilitate secure and expedited payments for subscription-based services.
What is UPI autopay, and how does it work?
In the financial year 2024, India recorded 131 billion Unified Payments Interface (UPI) transactions of an estimated value of ₹200 trillion. The growing popularity of UPI is due to the instant, secure, and flexible nature of digital transactions, which can be executed from the comfort of one’s mobile device.
However, to make a recurring payment, consumers must authorise a recurring payment mandate and be savvy about UPI Autopay.
UPI Autopay or UPI Automatic Payment feature enables payments to authorise recurring payment mandates and proceed to automate payments seamlessly and securely. It gives consumers the power to generate, modify, approve, and revoke payment instructions as per their needs. By activating UPI Autopay, businesses can simplify the entire process and gently nudge customers to renew their subscriptions.
Here’s a snapshot of how it works:
- A consumer selects their subscription plan of choice.
- They must give a one-time approval to automate recurring payments by using a UPI PIN.
- Once they confirm key details such as start date, payment amount, and payment frequency, the mandate is ready for execution. Payments intervals can be weekly, monthly, bi-annually, quarterly and annually.
- They will receive an email confirming the standing instructions related to the subscription.
- The value of the subscription will be debited from their account as per the payment mode of their choice (such as debit or credit card), on the due date.
- They can choose to pause or revoke the mandate as per their needs, anytime.
Key features of UPI autopay
Ensuring seamless and secure payments is a non-negotiable option for subscription businesses, which are dependent upon the successful renewal by customers. Now that we’ve covered what UPI Autopay is, let’s understand three ways in which UPI Autopay bridges the gap:
1. Automates the recurring payments process
As businesses scale up, they can benefit from automating recurring payments. This route reduces human interventions and helps lean teams manage this function. The adoption of UPI Autopay translates to minimal manual interventions.
In turn, businesses experience fewer errors and omissions and faster payments. Customers also have the flexibility to make payments as per their mode of choice— from credit cards and debit cards to net banking. Today, they can also avail of options such as Buy Now Pay Later, which helps them align spending with monthly cash flows.
2. Ensures subscription renewals
On-time renewals are the backbone of businesses thriving on subscription models. The success of renewals rests on a two-step process: First, the customer gives their one-time approval to proceed with a subscription.
Two, making payments as per the renewal cycle. UPI Autopay is a programme that seamlessly facilitates both steps. Thus, businesses can rest assured that integrating this facility raises the potential for customers to activate a new subscription or successfully renew their subscription of choice.
3. Brings transparency to process
The growth of cyber-attacks and phishing has made customers more cautious when making digital payments. They seek a transparent payment process, with full access to information at every step of the transaction.
A superior UPI Autopay feature informs customers and businesses about the status of the transaction via SMS and emails at every step of the way. Clear and timely communication raises customer trust and, in turn, facilitates a positive payment experience for customers and business owners.
Impact of UPI autopay
Today, subscription businesses span a wide spectrum of categories, such as telecom, streaming services, eCommerce, media, fashion and lifestyle, healthcare, fitness and wellness, food delivery services, education and training, software as a service (SaaS), pet care, and beauty and personal care.
Here’s a brief look at how activating UPI Autopay benefits businesses:
1. Boosts efficiency
The adoption of UPI Autopay increases operational efficiency for subscription businesses. A streamlined, automated process helps reduce the amount of time and effort that business teams need to put in to get customers to renew their ongoing subscriptions. Businesses can function with lean teams and save on labour and opportunity costs. They can also reduce payment errors and inaccuracies.
2. Increases customer trust and retention
Businesses can establish a culture of transparency and reliability. As customers find it easier to renew important services, this raises trust, which in turn can lead to higher customer loyalty.
They can strive to increase customer lifetime value and raise the subscription ticket size over time. Growth in customer retention also helps reduce customer acquisition costs.
3. Enhances cash flows
When a large number of customers fail to renew their subscriptions, this can negatively impact cash flows. On the other hand, on-time subscription renewals help businesses maintain a healthy cash inflow. They can stay focused on driving more revenues and optimising profitability.
To wrap up
Introducing a subscription model helps businesses retain customers of uninterrupted services and expand their revenue models. Offering a seamless, secure payment option is an important pillar for subscription businesses to try to ensure swift renewals.
This automated feature has emerged as the go-to option for subscription businesses looking to scale quickly. Transparency and data security are key advantages, too, making UPI Autopay a game-changer for subscription models. It ensures that recurring payments can be collected from customers on time, as per their needs.
Plural by Pine Labs offers Plural Gateway, a comprehensive payment solution that enables businesses to offer a seamless, secure experience to their customers. Businesses can offer multiple payment options, such as credit cards, net banking, and debit cards.
This payment solution also comprises the full spectrum of affordability solutions, such as branded EMIs, credit card EMIs, debit card EMIs, and no-card EMIs, as well as Buy Now Pay Later. Additionally, businesses can offer payment links to customers across multiple channels and leverage the UPI Autopay option for subscription models. Explore how we can meet your payment needs—submit your details below to start a conversation.
