UPI or credit card?

Recurring Payment via UPI or Credit cards?

Does your business require a collection of online payments for products and services at a regular interval?
Payment gateway providers make it easier for customer with Credit card option. With UPI coming into a lead, it would be a great contender. Which one should you go for recurring payments? Let us find out.

What are Recurring Payments?

In a recurring payment model, the service providers deduct the purchase amount from the buyer’s account at regular interval which is set up automatically.
There are multiple recurring payment businesses, some use an invoice method wherein a payment is automatically deducted against an invoice and others use Subscription Model business wherein you only pay as you use the services or product.

Related Post: Everything you need to know about Payment Gateway.

How Recurring Payment Work?

To enable recurring payment, a customer must save the card and grant permission for the recurring charge. Stored payment data can then be used used to automatically process payments for repeat services or subscription model business. Payment gateway service providers can automate all types of business billing needs. Some have payments based on invoice cycle others initiate and manage recurring payments. Solutions are different for both types and thus it is necessary to identify your billing needs before getting a recurring service.

What is UPI?

Unified Payment Interface (UPI) is a single platform that provides different banking services and features. If your bank is UPI enabled, you can create a UPI ID that can be used for making transactions. A transaction can be made using Aadhaar number, Mobile Number, and Virtual Payment Address (UPI ID). UPI allows the user to transfer and receive money from one bank account to another by using a smartphone. It enables the transfer directly from a bank account to the merchant and also handles the basic banking activities. UPI is a revolution that can be an alternative for e-wallets, in other words, UPI is the best thing in the online money market.
According to NPCI, in March Rs.1.33 Lakh Crore of transactions is made via UPI which is 24% increase from February 2019.
In 2018, UPI launched its second advanced version UPI 2.0 with more features but NPCI did not add recurring payments support in it. This feature could be coming in UPI 3.0.
The feature can enable customers to issue a one time mandate recurring payments for services from the merchants. The best example can be automatic payments of monthly bills and subscription-based services. RBI refuses to release these features for UPI in fear of its misuse.

Related Post: What? How? Why? about UPI.

UPI vs Credit Card for recurring payments?

online payment

Business prefers to set up recurring payments against Credit/debit cards. Some global businesses like iTunes set it up on debit cards with One-factor-Authorization.

Unified Payment Interface:

  • Recurring payment support for UPI is coming soon.
  • A customer has full control over authorization for the requested payment.
  • In the case of refunds, the merchant and buyer communicate directly.
  • UPI is will be available with the banks that do not provide recurring payments.
  • A recurring payment can be availed by anyone that has UPI.

Credit Card:

  • Recurring payments are available in credit cards.
  • Money is debited Automatically without customer’s involvement.
  • In the case of refunds merchant also has to deal with customers bank.
  • Recurring payments can be availed by those having a Credit card.
  • A recurring payment cannot be availed with banks that do not allow it on a card.

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