New Delhi: From April 1, auto-debit payments for utility payments and over-the-top (OTT) subscriptions may fail, owing to an RBI (Reserve Bank of India) guideline.
The RBI guideline, first introduced in August 2019 requested processing of e-mandate on credit score and debit playing cards for recurring transactions (service provider payments) with a cap of Rs 2,000. However the rule was later revised in December 2020 that mentioned that e-mandates for recurring transactions by way of playing cards (and UPI) have been hiked from Rs 2,000 to Rs 5,000 from January 1, 2021. The further Factor of Authentication (AFA) was permitted whereas processing e-mandates / standing directions on playing cards and Prepaid Payment Instruments (PPIs) for recurring transactions with with values as much as Rs 5,000.
The RBI had mentioned that processing of recurring transactions (home or cross-border) utilizing playing cards / PPIs / UPI beneath preparations / practices not compliant with the aforesaid directions shall not be continued past March 31, 2021.
RBI’s new rule on further issue of authentication requires banks to ship a one-time password (OTP) to clients to validate transactions above Rs 5,000. As per a number of media stories, banks haven’t but been in a position to efficiently perform RBI’s mandate. Hence after April 1, clients who’ve been availing auto-debit payments for utility payments and OTT subscriptions will face main hurdles from April 1.
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An RBI round had beforehand acknowledged that contactless card transactions and e-mandates on playing cards (and UPI) for recurring transactions have enhanced buyer comfort usually whereas benefitting from elevated use of expertise. These are additionally well-suited to make payments in a protected and safe method, particularly in the course of the present pandemic.
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