Mumbai: Some cardholders may see standing instructions for their payment Credit Card These failing from next month could be for subscription to online content platforms, edtech companies or online ads with standing instructions for payment. Some of these traders have not yet complied reserve Bank of Indianew requirement of additional factor authentication (OTP) For Recurring Payments Through the card though the deadline is less than a week away.
According to sources, around 75% of the banks have used technology to fulfill the RBI directive. However, there are some banks and merchants who are still in wait-and-watch mode. Banks are writing to customers, warning that some transactions may fail: “Effective October 1, 2021, banks shall post any standing instructions (e-mandate on cards for recurring transactions) on the merchant website/app.” will not accept any standing instructions given. HDFC bank Credit/Debit card, unless it is as per RBI-compliant procedure. The bank has recommended that customers use its bill-pay option for utilities or pay on the biller’s website using OTP.
According to Razorpay, which processes about a third of all recurring payment transactions, a dozen banks have already put in place the new setup, where even for repeated payments, the bank will alert the customer a day in advance and send them a Will also provide link. stop the mandate. “In the short term, there may be some disruption, but in the long term, this move by RBI may lift the recurring payments mandate off the charts,” it said. razorpay Chief Technology Officer and Co-Founder Shashank Kumar.
Kumar says the RBI directive addresses two key issues. Prior to this, discontinuing a standing instruction to a merchant could be extremely cumbersome as some would mail letters asking them to discontinue membership. Second, debit cards were a gray area and recurring payments were largely made in credit cards. Incidentally, even after October 1, the international mandate will continue as neither the bank nor the RBI has jurisdiction over international billers.
“There are 90 crore debit cards in India and with their inclusion, the market can grow manifold,” Kumar said. According to Kumar, by empowering customers to stop payments at any time, the RBI has increased the level of confidence. This can make online education or entertainment more affordable as the availability of this facility will encourage providers to have a monthly debit model instead of charging an annual fee.
Apart from requiring banks to alert customers, RBI has capped automatic debits at Rs 5,000 per month. This would mean that billers like insurance companies with larger installments would need to increase the frequency to enable auto-debit. In the case of utilities, many online payers use their bank’s bill payment platform for standing instructions and it will not have any effect.
According to sources, around 75% of the banks have used technology to fulfill the RBI directive. However, there are some banks and merchants who are still in wait-and-watch mode. Banks are writing to customers, warning that some transactions may fail: “Effective October 1, 2021, banks shall post any standing instructions (e-mandate on cards for recurring transactions) on the merchant website/app.” will not accept any standing instructions given. HDFC bank Credit/Debit card, unless it is as per RBI-compliant procedure. The bank has recommended that customers use its bill-pay option for utilities or pay on the biller’s website using OTP.
According to Razorpay, which processes about a third of all recurring payment transactions, a dozen banks have already put in place the new setup, where even for repeated payments, the bank will alert the customer a day in advance and send them a Will also provide link. stop the mandate. “In the short term, there may be some disruption, but in the long term, this move by RBI may lift the recurring payments mandate off the charts,” it said. razorpay Chief Technology Officer and Co-Founder Shashank Kumar.
Kumar says the RBI directive addresses two key issues. Prior to this, discontinuing a standing instruction to a merchant could be extremely cumbersome as some would mail letters asking them to discontinue membership. Second, debit cards were a gray area and recurring payments were largely made in credit cards. Incidentally, even after October 1, the international mandate will continue as neither the bank nor the RBI has jurisdiction over international billers.
“There are 90 crore debit cards in India and with their inclusion, the market can grow manifold,” Kumar said. According to Kumar, by empowering customers to stop payments at any time, the RBI has increased the level of confidence. This can make online education or entertainment more affordable as the availability of this facility will encourage providers to have a monthly debit model instead of charging an annual fee.
Apart from requiring banks to alert customers, RBI has capped automatic debits at Rs 5,000 per month. This would mean that billers like insurance companies with larger installments would need to increase the frequency to enable auto-debit. In the case of utilities, many online payers use their bank’s bill payment platform for standing instructions and it will not have any effect.
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