The Reserve Bank of India has revised regulations concerning recurring payments to enhance the e-mandate system’s clarity and security. This update aims to streamline digital transactions while ensuring robust customer protection on platforms like UPI, cards, and prepaid instruments.
Key changes include the exemption of transactions up to Rs 15,000 from requiring a one-time password (OTP). Transactions exceeding this amount will necessitate additional authentication, signifying a significant shift in automatic payment processing.
Certain payments falling between Rs 15,000 and Rs 1 lakh, such as insurance premiums, mutual fund subscriptions, and credit card bills, may bypass OTP under specific conditions. These regulations apply to UPI auto-pay, debit/credit cards, and prepaid payment instruments.
To empower customers, the RBI mandates pre-debit notifications at least 24 hours before transactions, detailing the merchant’s name, amount, and debit date. Users can opt out before deductions, and post-debit alerts are now compulsory, providing transaction details and grievance redressal information.
Furthermore, the RBI clarified that no fees can be imposed on customers for e-mandate setup or usage. Existing mandates for card users can be linked to reissued cards for continuity. Banks and payment service providers must ensure merchants comply with these guidelines. Additionally, existing rules limiting customer liability in unauthorized electronic transactions extend to recurring payments, safeguarding users against fraudulent auto-debits if reported within the stipulated timeframe.
These updates offer consumers a balance of convenience and oversight. Lower-value transactions like OTT subscriptions and utility bills will proceed smoothly without OTP interruptions, while higher-value transactions will have added security measures. The 24-hour alert system allows users to prevent unwanted deductions, addressing concerns related to auto-debits.
The revised e-mandate framework aligns with the RBI’s drive for seamless digital payments with robust consumer safeguards. As recurring payments become more prevalent, the regulator strives to maintain a delicate equilibrium between user convenience and transaction security. Staying vigilant to notifications and monitoring subscriptions regularly are crucial for users amid the evolving automated system.