UPI AutoPay Takes Over: 53% Share in Recurring Transactions Leaves Cards Behind in 2025

India’s digital payment system has evolved rapidly, and UPI AutoPay has emerged as a game-changer. It has now surpassed card transactions in recurring payments, showing a clear shift in consumer preference for easy and automated payment methods.

The UPI AutoPay feature, designed for hassle-free recurring payments, witnessed a threefold surge in transaction volume, reaching 175 million in January 2025—up from 58 million in January 2024, according to data from the National Payments Corporation of India (NPCI), which operates UPI. This rapid growth has enabled UPI to surpass card-based recurring payments processed through Standing Instructions set up via payment gateway companies. Source: Moneycontrol

The Emergence of UPI AutoPay

UPI allows instant money transfers between bank accounts through mobile devices. Building upon this foundation, NPCI launched UPI AutoPay in 2020 to address the increasing demand for automated recurring payments.

UPI AutoPay enables users to set up e-mandates for various recurring expenses, such as:

• Utility bills: Electricity, water, and gas payments.
• Subscription services: Over-the-top (OTT) platforms, magazines, and more.
• Loan EMIs: Equated Monthly Installments for personal or home loans.
• Insurance premiums: Regular payments for life, health, or vehicle insurance.

Users ensure timely transactions without manual intervention by authorizing these payments once, enhancing convenience and reducing the risk of missed payments.

Rapid Growth and Adoption

The adoption rate of UPI AutoPay has been remarkable. In January 2024, UPI AutoPay accounted for 33% of all recurring payments. By January 2025, this figure had surged to over 53%, indicating a significant shift in consumer behavior towards this payment method. This data underscores the increasing trust and reliance on UPI AutoPay to manage recurring expenses.

Its widespread adoption by banks, fintech firms, and telecom companies has fueled its rapid growth, making it the dominant mode of digital transactions in India. By 2023, UPI accounted for more than half of the country’s digital payment transactions.

Card Share Declines as AutoPay Gains Momentum

The share of cards in recurring payments has dropped from 42% last year to 31% this year, marking a significant shift in consumer preference. Meanwhile, the remaining recurring payments continue to be processed through Netbanking.

UPI Crosses Cards, Widening the Gap

The gap between UPI AutoPay and card transactions had expanded since September, when UPI first surpassed cards in recurring payments. This trend highlights the increasing dominance of UPI AutoPay in the automated payments space.

Surge in AutoPay Registrations

Customer registrations for UPI AutoPay, known as mandate creations, have surged to 35 million last month, a significant rise from 14.5 million in January last year. This rapid adoption reflects growing consumer trust in UPI AutoPay for seamless recurring transactions.

Lack of Aggregate Card Mandate Data

Unlike UPI AutoPay, no aggregate data is available for card mandate registrations, as card-issuing banks maintain this information individually. This lack of centralized data makes tracking the overall adoption of card-based recurring payments challenging.

Regulations Disrupt Card-Based Recurring Payments

Between 2020 and 2022, the Reserve Bank of India (RBI) introduced new rules for recurring payments, including additional factor authentication (AFA) for card transactions and a tokenization mandate. These changes disrupted existing standing instructions on cards. Customers were required to re-enter their card details for authorization, making the process complex. As a result, many opted for UPI, which had already become the go-to payment method for merchants and consumers. Source: Moneycontrol

Merchants and Customers Shift to UPI

Though the transition disrupted many subscriptions during COVID-19, merchants and consumers are now more comfortable using UPI AutoPay for recurring transactions. Even global platforms like Apple’s App Store no longer support card-based subscriptions in India; instead, they favor UPI, Netbanking, or Apple Wallet. A similar trend is observed across many businesses, big and small.

This shift highlights how regulatory changes and UPI’s ease of use have reshaped the digital payments landscape, making cards less relevant for recurring payments.

Factors Driving the Shift

Several factors have contributed to the growing preference for UPI AutoPay over traditional card-based transactions:

1. Simplicity and Convenience: Setting up recurring payments through UPI AutoPay is straightforward. Users can authorize payments directly from their bank accounts without the need to input card details repeatedly.
2. Enhanced Security: UPI transactions are secured with two-factor authentication, reducing the risk of fraud associated with card payments.
3. Broad Acceptance: A wide range of service providers, from utility companies to entertainment platforms, have integrated UPI AutoPay, offering consumers diverse options for automated payments.
4. Cost-Effectiveness: Unlike card transactions that may incur additional fees, UPI AutoPay transactions are often free or have minimal charges, making them an economical choice for users.

Impact on Businesses

Businesses across various sectors have recognized the benefits of integrating UPI AutoPay into their payment systems:

• Improved Cash Flow: Automated payments ensure timely receipts, aiding in better financial planning and stability.
• Reduced Payment Failures: Direct bank account debits minimize the chances of payment declines due to expired or blocked cards.
• Enhanced Customer Retention: Offering a hassle-free payment experience increases customer satisfaction and loyalty.

Know More:  SEBI Registered investment advisory |  Stock investment advisory

Challenges and Considerations

While UPI AutoPay offers numerous advantages, certain challenges persist:

• User Awareness: Despite its benefits, some consumers remain unaware of UPI AutoPay’s features and advantages. Ongoing educational initiatives are essential to bridge this knowledge gap.
• Technical Integration: Small businesses and startups may face hurdles integrating UPI AutoPay into their existing systems. Collaborations with fintech solution providers can offer streamlined integration processes.
• Transaction Limits: Currently, there are caps on transaction amounts for UPI AutoPay, which may not suffice for high-value recurring payments. Revisiting these limits could make the platform more versatile.

The Road Ahead

The trajectory of UPI AutoPay suggests a promising future. As more consumers and businesses embrace this platform, we can anticipate:

• Expansion into New Sectors: Industries such as education, healthcare, and real estate might adopt UPI AutoPay for fee collections, premium payments, and rent transactions.
• Technological Enhancements: Continuous upgrades, including improved user interfaces and faster processing times, will further boost user experience.

Conclusion

UPI AutoPay overtaking card transactions in recurring payments is a major milestone in India’s digital payments growth. Its ease of use, security, and cost-effectiveness make it a preferred choice for consumers and businesses. As digital payments evolve, UPI AutoPay is set to reshape automated payments, making transactions smoother and more efficient.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQs