All about eMandate - PayU:- www.deekpay.com

eMandate is a digital payments initiative launched in 2018 to streamline banking processes between service providers and end customers. Its main area of impact is recurring payments made by customers to their banks. With the launch of this initiative, the collection process of recurring payments has been optimised, while overall operational costs have been reduced.

This is particularly convenient for regular investment plans (SIPs), loan repayments and other regular payments that bank customers tend to make, resulting in a win-win situation. Hence, this article will reveal the key aspects associated with eMandate.

What is eMandate?

Generally speaking, an authorisation is an instruction given by an individual or business to their bank that involves deducting a specific amount from their account for investment or repayment. As the name suggests, eMandate is a form of electronic authorisation used by businesses to manage recurring payments such as insurance premiums, SIPs and loan instalments. This makes issuing reminders and late payment penalties a thing of the past, resulting in a win-win situation.

While recurring payments have always been an important part of the banking system, customer authorisation used to be done in paper form. However, with eMandate, users receive an eMandate notification 24 hours before the amount is deducted, which helps improve operational efficiency.

How does eMandate work?

Since its launch, eMandate has helped several industries with its convenient recurring payments. eMandate enrolment is completely paperless, which, combined with real-time authorisations and confirmations, makes recurring payments even more convenient. Here are some of the key benefits of eMandate:

Customer Experience: The one-time process allowed the bank to automatically debit the customer's account with a regular amount, thus creating a hassle-free ecosystem. This in turn improved overall customer retention and loyalty.

Ease of Payment: An automated debit infrastructure is always preferred to one that requires the customer to log on to a website, provide account details and make a payment.

Reduced administrative costs: Due to the automatic deduction of amounts, companies do not need to have a dedicated team to remind customers to pay, which improves operational efficiency and reduces overall costs.

What is the difference with eNACH?

When discussing eMandate versus eNACH, it is worth noting that the end result is the same, i.e., automated recurring payments are achieved. However, the key difference lies in the mode of implementation. In terms of limits, eNACH has a limit of Rs 10 lakh per authorisation, while eMandate's limit allows for periodic payments of up to Rs 1.5 lakh for credit or debit card payments.

What is the process for eMandate registration?

After the customer has communicated with the bank about setting up recurring payments, the following steps may be followed to ensure successful eMandate enrolment:

Click on the eMandate link you received via your registered email address.

Authentication

Once complete, you will be presented with the Create Licence screen. Make sure to fill in the required fields.

Perform OTP validation.

After verification, you will see a confirmation notification on your screen.

The above steps apply to debit card linking. If an eMandate link is required via Internet Banking, you will need to log in to your Internet Banking before receiving confirmation.

reach a verdict

In the Indian market, eMandate has been a success, thanks to the banking industry's efforts to improve it from a digital infrastructure perspective. With recurring payments becoming simple and cost-effective, it is no surprise that it has been widely welcomed by customers and banks alike.

common problems

Is eMandate enrolment applicable to all banks?The eMandate feature is applicable to around 40 banks in India. The enrolment process to be followed is done through the online banking portal of the respective bank.

How long does it take to register for eMandate? For all participating banks, eMandate is registered in real time. For banks that do not have this service, an offline authorisation will need to be taken, which will take approximately 21 days.

Who can apply for eMandate Individuals with Aadhaar Bank accounts associated with banks that support eMandates can choose to apply.

What happens when an account associated with e-mandate makes a transaction if the account balance is insufficient? As with any other online transaction, the payment will be declined.