From April 1, automatic recurring payments to change. Know why

Banks and payments getaways are seeking more time to adhere to the new RBI regulation. A senior e-commerce executive told PTI that the industry is not ready to impose the central bank’s e-mandate rule.

There will be no automatic recurring payments for your mobile, utility, recharges and other such bills from April 1 due to a new regulation of the Reserve Bank of India (RBI), which has made Additional Factor of Authentication (AFA) mandatory after March 31. This regulation will also impact recurring payments of Over The Top (OTT) platforms such as Amazon Prime, Netflix, Hotstar etc along with Direct To Home (DTH) services like Tata Sky, DishTV etc.

The limit for contactless card transactions and e-mandates for transactions through cards and UPI was increased by the RBI from ₹2,000 to ₹5,000 from January 1 this year. (Pixabay/Representative image)

On December 4 last year, the central bank instructed all banks including Non-Banking Financial Companies (NBFCs), payment gateways that the process of recurring transactions using credit or debit cards, Unified Payments Interface (UPI) or Prepaid Payment Instruments (PPIs) non-compliant with the AFA authentication will not be allowed to continue after March 31 this year, news agency PTI reported. The decision was announced with a view to strengthening the security and safety of transactions done through cards.

The limit for contactless card transactions and e-mandates for transactions through cards and UPI was increased by the RBI from ₹2,000 to ₹5,000 from January 1 this year. Banks will now be required to update customers beforehand about the recurring payment due and the transaction will be only carried out after the customer agrees to do so. For recurring payments above the limit of ₹5,000, banks will have to send a one-time password (OTP) to the customers.

Banks and payments getaways are seeking more time to adhere to the new RBI regulation. A senior e-commerce executive told PTI that the industry is not ready to impose the central bank’s e-mandate rule. Another official said that banks will decline the e-mandate transaction if RBI does not give more extension which will lead to major problems in recurring transactions and will also reduce the trust of customers in digitised payments.

(With PTI inputs)