Auto payment rules are likely to change from next month. The Reserve Bank of India (RBI) had earlier said that recurring transactions using debit cards, credit cards, Unified Payments Interface (UPI) or other prepaid payment instruments (PPI) would require Additional Factor Authentication (AFA). Large numbers of credit and debit card users set auto-payment instructions for a range of services from electricity and gas to music and movie subscriptions, and the new rules threatened to spark chaos for millions of users.
Banks have started informing their customers about this new rule. “As per RBI Recurring Payment Guidelines, with effect from 20-09-21, standing instructions on your Axis Bank card for recurring transactions will not be respected. You can pay the merchant directly using your card for uninterrupted service,” read a communication sent by Axis Bank.
In December, following a request from the Indian Banks’ Association (IBA), the RBI granted more time till March 31 to migrate to the new framework, which was later pushed to October 1, 2021. “Any further delay in ensuring full adherence to the framework beyond the extended time frame will now attract strict supervisory action,” the RBI had said.
“According to RBI Guidelines On ‘Processing e-mandate on cards for recurring transactions’ with effect from 1st October 2021, existing / new standing instructions which were registered without additional factor of authentication / will not be processed. We will implement the solution as soon as possible.” axis Bank on your portal.
RBI’s new rule on debit card and credit card auto-payment from October 1: All about it
1) All standing instructions installed on your credit card and debit card (both domestic and international) will not be processed without the additional factor of authentication.
2) Mandate registration, modification, deletion will require Additional Factor Authentication (AFA)
3) Customers will get a pre-debit (SMS/e-mail) notification 24 hours before the debit
4) Customer can opt-out of the transaction or mandate through the link provided in the pre-debit notification
5) Customers will have the facility to view/modify/cancel any standing instructions set on their card
6) Customer can set the maximum amount for each SI. If the transaction amount exceeds the maximum amount specified by the customer, the pre-debit notification will contain a link for the customer to authenticate the transaction with AFA. Without this authentication, the transaction will not be processed.
7) Any recurring transaction of an amount exceeding ₹5,000 will require AFA every time the amount is debited.
8) If standing instructions for bill payment are registered in your bank account, there will be no change. If these are on your bank’s debit or credit card, they will be rejected from 1 October 2021. Like Netflix, SI given on Amazon, insurance payments will be disabled. However, SI registered using bank accounts for Mutual Funds, SIPs, EMIs will continue.
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