UPI Auto Payment of Credit Card Bill Payment Limits Set to Surge Without AFA Requirement – What You Need to Know

UPI - Credit Card - Bill Payment Limits - AFA Requirement - TAXSCAN

RBI’s governor has announced plans to raise UPI auto payment limits for specific transactions without Additional Factor Authentication (AFA). Payments up to Rs 1 lakh, including mutual fund subscriptions, insurance premiums, and credit card repayments, will no longer require OTP-based authentication. The current AFA trigger for UPI auto payments exceeding Rs 15,000 will be revised.

Introduced in August 2019, the e-mandate framework aims to balance digital transaction security with customer convenience. The current limit for e-mandates without AFA is ₹15,000 (last updated in June 2022). With 8.5 crore registered e-mandates, processing ₹2800 crores monthly, the system has stabilised. However, for categories like mutual fund subscriptions, insurance premiums, and credit card payments exceeding ₹15,000, there’s a need to enhance the limit due to slower adoption.

To address this, the proposal suggests exempting AFA for transactions up to ₹1 lakh in specified categories, maintaining pre- and post-transaction notifications, opt-out facilities, etc. The revised circular is expected soon.

To encourage the use of UPI for medical and educational services, it was also proposed to enhance the limit for payments to hospitals and educational institutions from ₹1 lakh to ₹5 lakh per transaction. Separate instructions will be issued shortly.

Advantages of UPI Auto Payment

  1. No Manual Authentication for Small Transactions
  2. Streamlined E-Mandate Process
  3. Enhanced User Experience
  4. Support for Various Transactions
  5. Notification and Opt-Out Features
  6. Convenience
  7. No penalties or delay in bill payments
  8. Cashless transaction

Type Transactions can be paid through UPI

  1. Utility Bills
  2. Mobile Recharges
  3. Insurance Premiums
  4. Loan Repayment
  5. Credit Card Bills
  6. Subscription Services
  7. Mutual Fund Investments
  8. Rent Payments
  9. EMI for Purchases
  10. Subscription Boxes

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