Auto-Recurring Payments can Stop after April 1st due to this Reason
Reserve Bank of India has implemented new rules and regulations for recurring payments through debit and credit cards. This calls for an Additional Factor Authentication (AFA) to be implemented while making monthly payments to mobile phone bills, utility bills, subscription charges for online streaming services, etc.
OTT platforms including Netflix and Amazon, telecom service providers like Bharti Airtel and Vodafone Idea, power distribution companies like Tata Power and BSES will be impacted by these rules, resulting in Rs. 2000 crores of the monthly being stuck in the upcoming month.
As per reports, banks will also be required to send a one time password (OTP) to customers to verify any transactions with an amount of more than Rs. 5000.
The Internet and Mobile Association of India (IAMAI) has stated that millions of customer e-mandates are most likely to fail from April 1, since many banks haven’t taken the effort to meet the requirements set by the RBI for activating registration, tracking, modification, and withdrawal of e-mandates.
However, HDFC Bank, Axis Bank and the State Bank of India (SBI), and financial services firms such as American Express and MasterCard have started notifying their customers about the inability to process “standing instructions or recurring mandate-based payments”.
As per reports, the recurring payments that use UPI’s AutoPay feature may not be affected at all.
The August 2019 circular by the apex bank had allowed the processing of e-mandates on cards for recurring monthly payments from September 1, 2019. This implied that the customer will not have to follow the two factor authentication process every time they wanted to conduct a similar transaction with the same merchant…Read more>>