Udayavni Special

No automatic recurring payment from tomorrow


PTI, Mar 31, 2021, 9:59 AM IST

Credit: iStock Photo

New Delhi: Come April there will be no automatic recurring payment for various services including recharge and utility bill as RBI has made Additional Factor of Authentication (AFA) mandatory after March 31.

However, banks and payment gateways are seeking additional time to comply with the RBI directive on automatic recurring payment.

On December 4, RBI had directed all banks including RRBs, NBFCs, and payment gateways that the processing of recurring transactions (domestic or cross-border) using cards or Prepaid Payment Instruments (PPIs) or Unified Payments Interface (UPI) under arrangements/practices not compliant with AFA would not be continued beyond March 31, 2021.

As part of risk mitigation measure, RBI announced this step to bolster safety and security of card transactions.

Non-readiness of some of the players could impact recurring payment such as of utility bills, recharge of phone, DTH and OTT, among others, post March 31.

Recently, RBI enhanced the limit for contactless card transactions and e-mandates for recurring transactions through cards (and UPI) from Rs 2,000 to Rs 5,000 from January 1, 2021 with a view to further the adoption of digital payments in a safe and secure manner.

Under the new norms, banks will be required to inform customers in advance about recurring payment due and transaction would be carried following nod from the customer. So the transaction would not be automatic but would be done after authentication from the customer.

For recurring payments above Rs 5,000, banks are required to send one-time password to customer as per the new guidelines.

“All the ecosystem players, be it banks and payment gateways, are guilty of not taking RBI directive seriously from 2019 and not being able to come on a single platform, which we should have done at least a couple of months back, so that there could have been a smooth transition to the new way of doing recurring transactions,’ Payments Council Of India (PCI) Chairman Vishwas Patel said.

So, the Reserve Bank of India (RBI) requested to consider giving at least one month extension so that players meet RBI directives, Patel, who is executive director of Infibeam Avenues, said.

‘Everybody has understood the seriousness of it because it is Rs 2,000 crore a month business, as per PCI estimates. We hope that the cycle is not broken and the end consumers and merchants are not inconvenienced,’ he added.

A senior executive at an e-commerce company said the industry is not prepared to implement the e-mandate framework issued by RBI.

Starting April 1, customer e-mandate transactions will be declined by banks, if further extension is not granted by RBI, the official said, adding, this will cause major disruption to recurring transactions and will erode customer trust in digital payments.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Udupi girl Adline Castelino to represent India at Miss Universe 2020

Maha postpones class 10, 12 board exams after COVID-19 surge

COVID-19 2nd wave not under control yet, don’t ignore it, says Udupi DC in video msg

Yediyurappa is unanimous leader, will complete term as CM: K’taka BJP Prez

Online exams not possible, says DyCM Ashwath Narayan

SC terms plea for removing 26 verses from Quran as absolutely frivolous

Mallikarjuna Khuba’s supporters attempt to besiege CM’s car in Basavakalyan





Related Articles More

Flipkart inks pact with Adani Group, partnership to create 2,500 direct jobs

DoT likely to issue guidelines for telecom PLI within week

FPIs pull out Rs 929 cr from Indian mkts so far this month

Cairn offers to forego USD 500 mn if India agrees to pay principal due

India needs to grow faster to make up for contraction during COVID-19 pandemic: IMF

MUST WATCH

News bulletin 12- 04-2021 | UDAYAVANI

Mangaluru: Police avert highway robbery, arrest 8 from TB gang

Family members of Transport workers strike | Udayavani

Shankar Shetty | A Swimming Pool for Buffaloes | Udayavani

News Bulletin 11- 04-2021 | UDAYAVANI

Latest Additions

Vaccinated people better protected against Covid but can still transmit disease: Experts

President Kovind returns to Rashtrapati Bhavan after bypass surgery at AIIMS

Udupi girl Adline Castelino to represent India at Miss Universe 2020

Maha postpones class 10, 12 board exams after COVID-19 surge

COVID-19 2nd wave not under control yet, don’t ignore it, says Udupi DC in video msg

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.