What is E-mandate: Meaning, Registration & Working Process

11 January, 2024

Synopsis

The RBI and NPCI introduced e-mandate, a digital payment service that simplifies recurring payments for businesses.
An e-mandate is a customer's standing instruction allowing banks to auto-debit specified amounts.
E-mandates can be fixed or variable, catering to diverse payment needs.

Let’s say you want to invest in Mutual Funds via the Systematic Investment Plan (SIP) route. You select the preferred Mutual Fund and proceed to make the payment online. Here, you will be asked to fill out a form which will ensure that the SIP payment is deducted from your bank account per your preferred frequency. This process of automating recurring transactions is facilitated by an e-mandate. Keep reading on to know more about what e-mandate means and the registration process.

What is an E-Mandate?

Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) initiated a digital payment service—e-mandate—to streamline the payment process for companies. An e-mandate enables the processing of recurring merchant payments, typically without any human interaction once the payment has been set up.

A mandate is a standing instruction provided by the customer to the issuing bank and other institutions, which allows these financial institutions to automatically debit the amount mentioned in the mandate from the customer’s bank account. An e-mandate means a standing instruction in the digital format.

Workings of E-mandate

Initially, the customer (or the payer) provides consent to the merchant (or the payee) to initiate automatic deductions from their bank account. This usually involves filling out an e-mandate form, which is available on the website, app, or merchant store.

After filling out the e-mandate form, the customer needs to authenticate themselves using their credentials for Net Banking, Credit or Debit Card details, or other authentication methods provided by the bank. Once the authentication is complete and the e-mandate has been verified, the customer’s bank can set up recurring payment instructions in their system.

You can check your e-mandates by logging in to the internet banking portal or the mobile banking application of the respective bank. You can cancel the e-mandate at any point in time by contacting the merchant. The NPCI works as a mediator to resolve any issues or disputes that may arise between the parties. Typically, the e-mandate registration process is performed in real-time, and you can set up a standing instruction almost instantly.

The limit for a single transaction on Debit and Credit Card, Unified Payments Interface (UPI) and prepaid payment instruments (PPI) via e-mandate is set at ₹15,000. For transactions above this limit, additional authentication is necessary.

The maximum number of e-mandates you can set up is dependent on your bank; every bank has a defined limit for e-commerce transactions for different payment options. Additionally, not all banks may offer e-mandate facilities to their customers.

What Is The E-Mandate Registration Process?

Generally, this process involves logging in to the net banking website of your bank or the mobile banking application. Many merchants allow you to set up standing instructions on their website or application as well.

E-Mandate Use Cases

Numerous financial institutions that collect monthly payments from customers use e-mandate facilities. These may typically include:

Bill payments: You can set up automatic payments for utility bills like water, gas, electricity, etc.
Loan repayments: Your lender will typically ask you to fill out an e-mandate form to enable equated monthly instalments (EMIs) payments towards the repayment of the loan.
Subscription services: When you’re availing of monthly subscription services for say streaming channels, the provider enables monthly payments.
Mutual Fund investments: If you’ve opted for SIPs, you can select the e-mandate facility to automate your investments.

Types of E-Mandates

E-mandate payments can be of the following types:

Fixed e-mandate: The payment amount to the merchant will remain fixed, e.g., a monthly subscription plan for a streaming platform.
Variable e-mandate: The payment amount to the merchant can change, e.g., electricity bill payment.

E-Mandate & UPI

E-mandate, which was typically relevant to cards, can also be enabled on UPI for recurring payments. You can use a UPI-enabled app to allow recurring payments, including mobile bills, electricity bills, EMI payments, OTT subscriptions, insurance, and Mutual Funds among others.

Set Up AutoPay on PayZapp

PayZapp is an online payments app from HDFC Bank that lets you make payments towards numerous transactions, be it Mutual Fund payments, loan repayments, insurance premiums, or subscription services. What’s more, you can set up AutoPay on PayZapp to automate payments for select transactions. The merchant will set up a mandate on your account and the payee can then send a payment request to your UPI ID. Verify the transaction amount, purpose and date before approving the request. AutoPay can make transactions quicker and effortless.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.