As part of a series of measures against Paytm Payments Bank last year, the Reserve Bank of India curbed the use of the @paytm UPI handle. Following this, the National Payments Corp. of India (NPCI) mandated migrating these handles to other banks. However, multiple old handles remain tied to autopay mandates, putting these planned transactions at risk once the deadline is crossed, two people familiar with the matter said.
“Users will have to first cancel the existing mandate linked to the @paytm handle and then create a fresh one with their new handles. There has to be a greater push for users to do that,” said an insurance industry executive said on the condition of anonymity. Despite repeated reminders, many customers have not migrated yet, the executive added.
Emails sent to the Reserve Bank of India (RBI), NPCI and Paytm remained unanswered.
Clampdown
On 31 January 2024, RBI barred any addition of funds to Paytm Payments Bank accounts, wallets and Fastags. In February 2024, RBI said that @paytm UPI handles should be migrated to a different clutch of banks and that the payments bank will not be allowed to undertake any transactions post 15 March.
On 17 April, Paytm said it is transitioning these handles to Axis Bank, HDFC Bank, State Bank of India and Yes Bank. The people cited earlier said that the transition was quick for everything else other than autopay mandates.
While autopay failure can affect recurring payments in any industry, the impact can be worse in insurance—Missing a premium payment can send your policy into a grace period, after which the policy can lapse, depriving the customer of its benefits and coverage.
Industry executives said that at least ₹1,400 crore worth of annual insurance premium autopay mandates are still tied to old Paytm handles. Autopay allows users to set up recurring UPI payments to various merchants. The industry has taken up the matter with retail payment umbrella body NPCI, but there has been no solution so far, they said.
“August 31, 2025 is the final deadline for servicing UPI autopay mandates on @paytm handles. The decision has already undergone two extensions, and further continuance beyond this deadline is not envisaged,” according to an NPCI communication seen by Mint. “We request all concerned merchants to urgently engage with Paytm to migrate active mandates and avoid disruption to customer services.”
Premium pain
The executive cited above added that just for insurance, there are nearly 500,000 @Paytm UPI autopay mandates with an insurance aggregator which would fail after 31 August. These are primarily linked to life insurance premium payments, he said.
Merchant Payments Alliance of India, an association of digital merchants including Netflix, Spotify, Amazon and Policybazaar, has been lobbying to resolve the issue.
“Due to the absence of an automated solution, customers stand to encounter disruption, businesses could struggle to realize payments, and in some sectors, critical services might be interrupted and product benefits curtailed,” an MPAI spokesperson said. “Ideally, this migration process should be automated, and without any customer intervention. Sadly, at this point, there’s no functional and scalable solution for mandates that are at risk. Until this solution becomes available, critical sectors (insurance, lending and healthcare) should be granted exemptions,” the spokesperson added.
Seeking data
According to the executive cited earlier, NPCI has sought data from merchants on the number of active autopay mandates using the @paytm handle, along with transaction value. “NPCI wants merchants to work directly with Paytm to resolve this issue and look for alternatives,” said the executive.
Many merchants are also wary of the shifting customers to another handle because they fear some users might cancel their recurring payments when reached out to, he added.
Experts said that auto pay was designed to simplify subscriptions and collections and while the underlying infrastructure is all in place, altering autopay mandates is bound to have friction.
Changes in autopay needs customers’ consent, and cannot be changed at the backend by the payment provider or the merchant, said Parijat Garg, an independent digital lending consultant.
“Customers will, in general, have an inertia to start new autopay mandates and might also be worried about UPI frauds when clicking on links asking for changes to existing mandates,” said Garg. He added that given how large Paytm’s presence is in the digital banking segment, such a massive exercise will take time.
Info haze
What has added to the uncertainty and challenge is the absence of any official information in the public domain, he said, adding attempts to manually migrate some customers were unsuccessful as customers misunderstood the attempts as those perpetrated by scamsters due to phishing and social engineering concerns making the re-registration of fresh mandates an unsuccessful exercise.
“The Paytm issue was resolved last year, and these autopay mandates have been in place for several years, and have been working fine for the past year. So, this sudden policy change is difficult to communicate to users, especially because there was so much miscommunication around the changes for Paytm users last year,” one of the two officials cited above said.
Interestingly, for autopay mandates from other bank accounts, RBI had said in 2024 that loan instalments registered with other bank accounts “can continue” without setting a deadline or clarifying for other recurring payments such as insurance premiums.