How Secure is UPI Autopay? Understanding RBI Guidelines & Compliance

India’s digital economy is experiencing a surge in recurring payments, driven by sectors like OTT streaming, insurance, education, and utilities. As of January 2025, UPI AutoPay has captured 53% of all recurring transactions, surpassing traditional card-based methods. This shift reflects a growing consumer demand for smooth, hassle-free, automated payment experiences.

UPI AutoPay by PhonePe Payment Gateway stands at the forefront of this transformation, offering a secure and efficient framework for recurring transactions. It empowers customers with control over their payments while enabling businesses to achieve timely collections and reduce operational overhead.

Read More: What is UPI AutoPay

However, with increased adoption comes the imperative for stringent security and compliance. In this article, we’ll delve into the mechanics of UPI AutoPay, explore the regulatory safeguards in place, and outline best practices for businesses to implement this system securely and in full compliance with RBI directives.

What are the Key RBI Guidelines for UPI AutoPay?

1. One-Time Registration with Additional Factor Authentication

To initiate a recurring payment via UPI AutoPay, users must complete a one-time registration process. This involves authenticating the transaction using AFA, typically an OTP, through their UPI app.

• Failure to implement AFA can lead to unauthorized or fraudulent mandates, resulting in financial losses and legal repercussions.
• Both Businesses and Payment Gateways must ensure the AFA process is correctly implemented and enforced.

2. Transaction Limits and Authorization

1. For transactions up to ₹5,000: Once the e-mandate is set up, payments can be auto-debited without the need for further authentication.
2. For transactions exceeding ₹5,000: Each payment requires separate AFA, OTP authorization, preventing fully automatic deductions.

• Processing high-value transactions without the requisite AFA can result in unauthorized debits, customer disputes, and regulatory penalties.
• PGs and UPI Apps must enforce transaction limits and ensure AFA is obtained for high-value transactions. 

3. 24-Hour Pre-Debit Notification

Banks are mandated to send a pre-debit notification at least 24 hours before processing any recurring payment. This notification allows users to review, pause, or cancel the upcoming transaction.

• Omitting pre-debit notifications can lead to customer dissatisfaction, increased disputes, and potential regulatory action.
• Banks and PGs are responsible for ensuring that timely and accurate notifications are sent to users.

4. E-Mandate Validity and Management

The e-mandate remains valid for a maximum of 25 years. Users have the flexibility to pause, revoke, or resume the e-mandate at any time through their UPI app.

• Restricting user control over mandates can lead to regulatory violations and erosion of customer trust.
• UPI Apps must provide user interfaces for mandate management, and businesses should integrate these features into their platforms.

5. Exemptions for Specific Payments

Certain recurring payments, such as auto-replenishment of NETC FASTag and RuPay National Common Mobility Card, are exempt from the 24-hour pre-debit notification requirement. These transactions can be processed without prior notification, provided they adhere to the established criteria.

• Misapplying exemptions can result in unauthorized debits and regulatory scrutiny.
• Banks and PGs must ensure that exemptions are correctly applied only to eligible transactions.

6. Security and Compliance

All UPI AutoPay transactions are subject to RBI’s e-mandate framework, ensuring secure, consent-based payments. Users can manage their recurring payments directly through their UPI app, enhancing control and transparency.

• Inadequate security measures can lead to data breaches, financial fraud, and loss of customer confidence.
• PGs and Businesses are responsible for implementing robust security protocols and ensuring compliance with regulatory standards.

7. Implementation for Businesses

Merchants and service providers offering subscription-based services must integrate the e-mandate framework into their payment systems. This includes obtaining user consent through AFA and ensuring compliance with the notification and authorization requirements to prevent payment failures.

• Non-adherence can lead to payment failures, customer attrition, and regulatory penalties.
• Businesses must ensure their systems are compliant and work closely with PGs to maintain adherence to guidelines.

Conclusion

As UPI Autopay continues to evolve, it’s becoming a game-changer for digital payments. For merchants, the biggest benefits lie in access to the vast UPI user base and the assurance of consistent cash flow from recurring payments. While UPI AutoPay offers users seamless control over payments, businesses gain predictable revenue streams and a simplified payment collection process, which fosters long-term customer relationships.

The Reserve Bank of India is taking bold steps to enhance security with tokenization and stricter authentication measures, setting higher standards for the entire industry. These efforts are already reinforcing trust and driving wider adoption of UPI Autopay in today’s digital payment landscape.

If you’re building a business online and want to automate recurring payments, start with a platform that understands UPI inside and out. Choose PhonePe Payment Gateway for seamless integration, enterprise-grade support, and a future-proof solution. With PhonePe PG, you don’t just get compliance, you get reliability, scalability, and unmatched trust.