Making manual recurring payments has always been tedious. With the introduction of eMandates, both banks and their customers have a seamless experience when it comes to regular payments done for premium payments, SIPs, or loan repayment.
EMandate was introduced in the year 2018. Being a digital payment initiative, it sought to simplify the banking process between the service provider and the end customer. The key area of impact is recurring payments made by the customer to the banks. With the introduction of this initiative, the collection of recurring payments has been streamlined along with a reduction in overall operating expenses.
This is especially convenient for SIPs, loan repayment, and other recurring payments that bank customers tend to do. Thereby creating a win-win situation. Hence, as a part of this article, we will uncover key aspects associated with eMandate.
What Exactly Is eMandate?
A mandate generally refers to instructions provided by individuals or businesses to their banks in regards to debiting specific amounts from their accounts for investment or repayment. eMandate as the name suggests refers to an electronic form of the mandates used by businesses to manage recurring payments such as insurance premiums, SIPs, and loan installments to name a few. This makes giving out reminders and late penalty charges a thing of the past, thereby creating a win-win situation.
While recurring payments have been an integral part of the banking system, authorization by customers used to be done in a physical format. However, with eMandate, the user receives an eMandate notification 24 hours before the amount is debited and overall helps achieve operational efficiency.
How Is eMandate Helping Out?
Since its introduction, eMandate has helped several industries with its ease of recurring payments. With the eMandate registration being completely paperless in addition to real-time authorization and confirmation, recurring payments have never been more convenient. Here are a few key advantages of eMandates–
- Customer Experience: A one-time process allows banks to auto-debit recurring amounts from the customer’s accounts, thereby creating a hassle-free ecosystem. This, in turn, improves overall customer retention and loyalty
- Ease of Payments: An infrastructure that allows for auto-debit is always preferable compared to the one that requires customers to log into a website, provide account details and make the payment.
- Reduction in Administrative Costs: Since the amount is debited automatically, businesses are not required to dedicate specific teams to remind the customer of payments. Thereby creating operational efficiency and reducing overall costs.
How is This Different from eNACH?
When discussing eMandate vs eNACH, it’s worth noting that the end outcome is the same that is, enablement of automated recurring payments. But the key difference lies in their implementation. In terms of limits, eNACH has a limit of ₹10 Lakh per mandate. However, eMandate limit allows for recurring payments of only up to ₹15,000 for credit or debit card payments.
What is the Process Involved for eMandate Registration?
After customers engage with their banks for the purpose of setting recurring payments, the following steps may be followed to ensure a successful eMandate registration:
- Click the eMandate link made available on your registered email
- Proceed to authentication
- Once done, you will see the ‘Create Mandate’ screen. Ensure mandatory fields are filled out.
- Proceed to OTP verification.
- After verification, you will see a confirmation notification on your screen
The above steps hold true for linking your debit card. In case eMandate link needs to be done for net baking, an additional step of logging into your net banking is to be done before receiving the confirmation.
eMandates have been a success in the context of Indian markets, driven by the bid to improve digital infrastructure from the perspective of the banking industry. With recurring payments made easy and cost-effective, it is not a surprise that it has been quite popular with both the customers and the banks.
Frequently Asked Questions
eMandate feature is available to about 40 banks in India. The registration process that is required to be followed is to be done through the internet banking portal of the respective banks.
eMandate is a real-time registration for all the banks involved. For banks that do not have this facility, the offline mandate would need to be taken up, which takes about 21days.
Individuals with Aadhaar linked bank accounts with a bank supporting eMandates may choose to apply.
Similar to other online transitions, the payment will be denied.