E-NACH and E-Mandate

Have you been typing ‘what is enach’ or ‘what is emandate’ but not sure what they are? Then this article is for you.

Essentially, E-NACH and E-Mandate are payment services that allow those with bank accounts to automate their recurring payments easily. These services allow merchants and customers to manage bills and payments such as insurance, SIP, utility bills that are recurring without having to manually initiate or process payment. This eliminates the need for manual payments, verification, multiple reminders or even late fees.

A Brief History About E-NACH & E-Mandate

The importance of E-NACH and E-Mandate can be understood when we take a look at the circumstances that led to its introduction.

Imagine owning an online business (B2B or Saas) that relies on recurring payments such as for a subscription service. Before E-NACH or E-Mandate, these payments were collected manually generally through ECS mandates.

What is the ECS Mandate Process

Prior to E-NACH and E-Mandate, ECS or Electronic Clearing Services were used for payments. This is where a mandate is submitted to the respective bank or company through a physical form. The steps were cumbersome and time-consuming. For example, if you wish to invest in an SIP the steps involved were -

However, for the next SIP, this step would have to be done all over again. These steps would also have to be repeated if the bank rejected the application for whatever reason.

All of this changed with the coming in of the National Payments Corporation of India or NPCI which brought in multiple technological innovations in retail payment systems for better efficiency and reach. One of the services/systems offered is the National Automated Clearing House or NACH which is an offline system for bulk transactions. All electronic mandates are registered on this platform thereby enabling the process of online payments. You can read more about this here.

What is E-Mandate and E-NACH?

Now that we have an insight into how payments worked before E-Mandate and E-NACH, it is time to understand these two payment systems.

What is E-Mandate and E-NACH?

While both these systems are for automated recurring payments, E-Mandates are provided by certain individual banks (currently around 5) and E-NACH is governed by the NPCI.

These mandates allow users to approve recurring payments digitally all at once making it easy for merchants and businesses to collect these types of payments every month. No longer will customers have to go to banks or physically submit forms or wait days for approval. Thanks to these systems, all recurring payments such as SIPs, insurance premiums, EMI auto-debit, utility bills, etc. can be done easily and safely. Considering the number of online businesses that have come up, this innovation was the need of the hour.

E-Mandate and E-NACH Process

There are a few entities involved in the entire process such as the customer, the company that has requested the E-Mandate, bank holding the customer’s account, sponsor bank (banks that have been empanelled with the NPCI for the purpose of E-Mandate), and the NPCI.

To explain this, let us continue with the previous example of SIP payments. Once the customer fills in the mandate form details as requested by the fund house, the fund house will check if your bank is registered by the NPCI for mandate creation. If not, alternate options will be provided.

Once this is done, you will be redirected to the NPCI’s page followed by the bank’s authentication page. Your account number and other details are verified following which the mandate that has been filled will be displayed for your approval.

After this, you will be redirected back to the website of the fund house where your mandate status will be displayed which is then confirmed. This entire process is also completely safe and secure.

Unlike the ECS workflow, the E-Mandate and E-NACH process is completely online, takes just a few hours for authentication, and is a smooth and hassle-free process.

Given below are some of the ways how these two payment systems have benefited companies and customers -

  • Convenience

One of the biggest benefits of these payment systems is the convenience offered to both customers and businesses. Not only is the entire process of payments less cumbersome, it can also be done more conveniently while saving on time and effort for all parties involved. Additionally, since payments are auto-debited, customers will no longer have to pay their bills manually or miss their payments especially when it comes to loan EMI payments. The need for constant reminders is also eliminated.

  • Flexible Billing

Businesses that rely on subscription based payments can modify billing effectively. This option is also available to customers who can upgrade their subscription plan or even cancel the same easily.

  • Subscriptions and Utility Payments

If you are an ardent Netflix or MXPlayer user, you have these payment systems to thank as they are responsible for easy payments that can be done from the comfort of your home. Another huge advantage of E-Mandate and E-NACH is evident when it comes to utility payments as these are paid regularly. However, it is to be noted that not all merchants accept recurring payments for utility bills as the amount can vary and you may have to pay the same manually. You will have to check with your provider for more details on this.

  • Failure Management

In case your payment did not go through, you will be notified of it immediately and corrective measures can be taken as well making the process convenient while reducing the chance of errors.

If you have been a customer of Money View, once your documents are verified, you will receive a NACH form which needs to be printed, signed, scanned, and sent back to us.

The reason why E-NACH is necessary is so that we can enable the auto-debit facility and deduct your EMI amount automatically every month. If this process has not been set up, you will have to manually pay your EMIs every month which is cumbersome. Additionally, if you fail to pay your EMIs despite reminders, there may be a penalty charged. Recurring payments such as EMI payments require customers to submit a NACH form.


Electronic payment services such as E-NACH and E-Mandate are a boon to a number of companies dependent on recurring payments as well as to customers who can enjoy seamless payment options. Not only is the process hassle-free and simple, a number of broader services can also be offered due to the benefits provided by these two payment options. The digital payment space in India is changing at a rapid pace and technological advancements are necessary to ensure this.

Enach and E Mandate Related FAQs

As long as the customer has a bank account that has been linked to his/her Aadhaar at a participating bank, he/she can apply for an E-Mandate.

There is no limit to the number of E-Mandates that can be set up for a particular bank account.

Payments are generally reflected as NEFT bank transfers to the merchant account from the customer account.

In case of insufficient funds, the payment is denied. Additionally, in some cases a penalty may be charged as well if this was a recurring payment.

It is possible to cancel your E-NACH or E-mandate. However the process will vary from one institution to another.

If it is a bank’s E-Mandate you wish to cancel, contacting the bank directly is advised either by calling the customer care, or sending an email.

Additionally, you can also approach the user institution a few days prior to the payment due date.

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