UPI AutoPay set to drive incoming wave of consumer AI companies in India

Mint

16 hours ago

The launch of UPI AutoPay has led to a new breed of startups and is helping others tweak their strategy to make the best use of the technology. The shift comes at a time when Indians are spending more time and money on the internet.
AutoPay's adoption has been sector agnostic. Between 2024 and 2025, startups in edtech, wellness, health tech, fintech, as well as media and entertainment, have raised nearly $7.6 billion from venture capital firms, according to startup data intelligence platform Tracxn.
Some of the firms that have adopted a subscription model or have enabled UPI AutoPay include content platforms like Kuku FM and Pocket FM, edtechs like SpeakX, Khare Classes, and Seekho, and wellness platforms like mental health startup Wysa and weight loss and nutrition tracking startup HealthifyMe. 'Anywhere that people need to make regular payments, whether it's towards entertainment or financial services, AutoPay is boosting that,' said Munish Vaid, vice president at global consulting firm Primus Partners.
In 2025, India will have over 900 million internet users, according to a 2024 report from market research firm Kantar and the Internet and Mobile Association of India. As a result, UPI AutoPay's adoption is also set to increase. But it isn't new to us. Indians have always paid for television channels and newspaper subscriptions, and even milk. 'AutoPay has opened people up to subscriptions online. It isn't a new market, this is the offline market that is coming online,' said Anant Vidur Puri, partner at global investment firm Bessemer Venture Partners.
Indians spend an average of nearly seven hours a day accessing various services and products on the Internet, according to social media intelligence firm Meltwater. Mobile devices account for 58% of this time.
Launched in 2021, the National Payments Corporation of India (NPCI) introduced UPI AutoPay, a functionality for recurring payments that allows users to set up e-mandates for things ranging from electricity bills to mutual fund systematic investment plans to even OTT subscriptions. As a result, startups have pivoted their business models: subscription-first platforms priced for the Indian consumer. 'What UPI AutoPay has done is that it has enabled people to recurringly pay for something they want to pay for,' said Puri.
The transaction volume of UPI AutoPay from the top 10 remitter banks nearly doubled to 29.29 million in May 2025 from 16.73 million in May 2024, according to data from the National Payments Corporation of India, which runs UPI. In contrast, the volume of UPI transactions in May this year alone stood at 18,677 million, valued at ₹ 25 trillion.
Harsha Kumar, partner at Lightspeed India, said, 'UPI was the first large tailwind because of which transaction platforms such as ecommerce, transportation and utility all grew. Now, UPI AutoPay is the next big tailwind on the back of which we will see a bunch of fintech and content solutions come up. It's because these are two models where AutoPay or subscription works best." The volume of UPI transactions has gone to 13,116 crore in FY24 from 92 crore in FY18, a compound annual growth rate of 129%.
For example, prior to UPI AutoPay, consumers would make mutual fund investments through systematic investment plans (SIPs), doing it through accounts on MF websites. Essentially, AutoPay makes it easier for people to set up their SIPs on brokerage apps like Groww, Zerodha and AngelOne.
AutoPay reduces friction for both users and businesses. Traditional subscription systems use credit cards, a financial product with little penetration in India. In comparison, UPI AutoPay is mobile-first, low-cost, and works for small-ticket services. Thirty-seven million AutoPay mandate registrations were made in January this year alone.
English-language learning startup SpeakX uses a subscription model, enabled by AutoPay. 'We've been able to capture a market which was untouched because digital penetration there was low. What it has enabled is access to people who want solutions, and it has become feasible for us to serve them at an affordable cost,' said company founder and chief executive Arpit Mittal.
The company's product has seen considerable traction from lower-income groups as well as Tier-II and Tier-III cities, primarily due to its ₹ 300-a-month subscription model. Mittal argues that prior to the enablement of AutoPay, consumer companies had to be sales-led in order to convince users to join a platform.
'If I had to do SpeakX five years ago, my only option would be to sell packages to people, and not subscriptions. As a result, my product would be priced very differently and it would be out of the reach of many Indians,' Mittal said.
SpeakX is raising up to $15 million in a pre-Series B round, the largest for a personalised AI-led edtech platform so far this year. Existing investor Elevation Capital has already paid the company. Other investors include consumer tech VC firm Goodwater Capital and global investment firm WestBridge Capital.
Seekho, an online edutainment OTT platform, pivoted from a yearly payment model to a monthly one. The company had started out at the same time as the National Payments Corporation of India launched AutoPay back in 2021. At the time, monetisation wasn't the goal. By 2023, the company pivoted to a monthly subscription, led by AutoPay. 'It helped us drive good user retention, and for us, we saw it as an opportunity to finally build Netflix-like subscription businesses in India, something that wasn't possible before,' said Rohit Choudhary, founder and CEO of Seekho.
As a result of the switch, the company was also able to increase its pricing, starting at ₹ 99 per month before raising it to ₹ 199 a month. That's what Seekho used to charge users yearly before. The pivot was led primarily because the company realised they could acquire more users and keep them engaged for less money spent. 'We saw recurring subscribers increase 3 to 4 months after we shifted to a monthly plan. After that, however, we had returning users coming back, which is where we saw hockey stick growth,' said Choudhary.
Seekho claims that it currently has four million users and retains between 30 to 35% of its users over a 12-month period. Their market is spread across India. In terms of revenue, the company said they make ₹ 40 crore every month and that 85% of their user base are paying customers. Choudhary narrates a user interview who said that, considering they require ₹ 400 to recharge their phone every month, paying ₹ 200 to learn isn't a bad deal. 'This is how people compare their spends with Seekho. They don't really compare it with OTT platforms, but to a newspaper or a coaching class where they're paying to learn something.'
But there's still a long road ahead.
Often, the AutoPay mandate cancellations are hard to find, and users complain that they're losing money on something that they didn't want to continue to pay for.
A letter had been sent to the Reserve Bank of India (RBI) from 'an aggrieved user' earlier this year, alleging unfair auto-debit practices from some of these startups. The letter said that some of these apps didn't provide users a simple way to cancel auto debits and were instead being forced to rely on UPI apps to make those cancellations. 'Eventually, builders will learn how to build for AutoPay, and consumers will learn how to manage AutoPay,' said Lightspeed India's Kumar.
'But we're headed in the right direction.'