Launching a recurring auto-debit feature
Many of the loan customers for banks and NBFCs end up defaulting on their EMIs due to the auto-debit facility not being set up correctly, or failure. Such inadvertent missed repayments may hamper the credit profiles of genuine customers. On the other side of the spectrum, failed payments for lenders can quickly turn into lost/delayed revenue recognition, increasing delinquencies, and NPLs. Tracking and profiling such cases to get the payments completed is cumbersome.
The pandemic accelerated the push for cashless transactions and digital banking services. Digitization in debt collections is the need of the hour for banks, NBFCs, digital lenders, and debt collection agencies. eMandates are useful to enable both recurring and one-time payments, helpful in streamlining transactions, driving efficiencies, and improving customer experiences. eMandates are critical components of making digital repayments more robust and error-free.
What are eMandates?
e-Mandate is a digital loan repayments service introduced by the RBI and the National Payments Corporation of India (NPCI). It serves as an underlying infrastructure for businesses in India to collect recurring payments without any human intervention. These are standard instructions that customers provide to their issuing bank and other institutions allowing them to automatically debit the mentioned amount from their bank account.
eMandates on Billzy automate the payments for collections
Billzy offers lenders the capability to collect payments digitally from their loan borrowers. Credgenics platform integration with the lender’s Loan Management System leverages our eMandate registration service so that the borrowers can set up recurring automated payments against their bank accounts, in addition to the current mechanism of sending Billzy payment links. Registration, payments, and collections are all done seamlessly.
eMandate on Billzy
Setting up recurring auto-debit through Billzy via the NACH mandate for monthly loan repayments on the due date is easy.
- Quick registration and simple payments process for borrowers
- Recurring auto-debit from end customer/payee bank account based on the subscription structure
- Settlements to lender’s account in T+1 settlement period-basis
- e-Nach Subscription and payments status tracking through system-generated reports to lenders
Billzy eMandates Impact Areas
- Caters to all segments of borrowers ranging from Pre-due to NPAs
- Automated notifications and reminders to borrowers for maintaining sufficient funds in their bank accounts to avoid failures
- Quick payment acceptance resulting in stronger consumer connects
- Minimal risk of late payments, fraud, and theft
- Reduced cost of collections
- Seamless recurring payments ensure that staff can focus on other activities
Billzy eMandate for higher efficiencies
Customers can set up recurring payments for their outstanding loan amount EMIs as well as other utility bills, on their accounts using Billzy. By subscribing to eNACH, customers can schedule their payments through a simple online process at the start of the policy period. This will eliminate the need to manually track and make individual payments for multiple dues. It enables lenders to avoid sending multiple reminders, resulting in improved collection rates, reduced collection time, and improved efficiencies.
FAQs about Billzy’s e-mandate feature
Q: What are the prerequisites for Billzy eNACH feature?
A company should be live on Billzy Payments, via BBPS or Non-BBPS flow
There should be permission for ‘Billzy Nach creation’ in the permission set
Q: What is covered in the scope of the e-mandate feature?
Nach Subscription configuration at company levels: Creating different subscription plans for different cohorts
Nach Registration: The client’s customers will receive Nach authorization links through which they can register themselves for Nach auto-debit
Auto-debit: Scheduling and enabling auto-debit through Nach of the registered customers
Q: What are the favourable scenarios for triggering eNACH links (assuming the company is live on Nach)?
A loan should be present in the allocation month when we are triggering the link
A loan should not have an ‘Active’ or a ‘Bank approval pending’ status for Nach