The Reserve Bank of India has allowed an increase in the limit of e-mandates/standing instructions on credit/debit cards and Prepaid Payment Instruments (PPIs) for recurring transactions. 15,000, from 5,000, with immediate effect. This was the limit before January 1, 2021 2,000. “On a review of the implementation of the e-mandate framework and the security available to the customers, it has been decided to increase the limit. from 5,000 15,000 per transaction and will come into effect immediately,” RBI said in a notification on June 16.
RBI Governor Shaktikanta Das recently said, “Requests have been received from stakeholders to increase the limit under the framework to facilitate payment of large value like subscription, insurance premium, education fee etc.”
“In order to further enhance the customer convenience and to avail the benefits available under the framework, it is proposed to increase the limit of from 5,000 15,000 per recurring payment,” he said.
Under the existing framework, processing of e-mandate based recurring payments on cards requires an additional authentication factor (AFA) during registration, which sends a pre-debit notification. Subsequent recurring transactions will be executed without the additional factor of authentication for the benefit of the facility.
According to RBI, major banks are providing the facility and the transaction volume is seeing good traction and so far more than 6.25 crore mandates have been registered under this framework, which includes more than 3,400 international merchants.
The limit on e-mandate on the card for recurring payments increased from Rs. from 5000 Ramesh Narasimhan, CEO, Worldline India, said, “15000 is a welcome move as it will not only benefit consumers in setting mandates for multiple categories of payments, but also involve more players from the insurance, education and credit sectors.
How to Register for E-Mandate Based Recurring Transactions:
The Credit/Debit Cardholder opting for e-mandate facility on the Card will have to initiate a one-time registration process with the additional factor of authentication verification by the issuer.
an e-mandate on credit or Debit Card Recurring transactions will be registered only after successful additional factor of authentication or AFA verification, in addition to the normal process required by the issuer, as per RBI
Registration will be completed only after the issuer has received all the necessary information, including the validity period of the e-mandate and other requirements. Facility to modify the validity period of e-mandate, if required, at a later stage will also have to be provided.
During the registration process, the Cardholder will be given an option to grant an e-mandate for either a pre-specified fixed value of a recurring transaction or a variable value of a recurring transaction.
Any amendment to the existing e-mandate will require AFA verification by the issuer.
As a risk mitigation and customer convenience measure, the issuer shall send a pre-transaction notification to the Cardholder at least 24 hours prior to the actual charge/debit.
While entering the e-mandate on the Card, the Cardholder will be given the facility to choose a mode from the available options (SMS, Email, etc.) to receive pre-transaction notification from the issuer. The facility to change this mode of receiving pre-transaction notification will also be provided to the Cardholder.
The issuer shall provide an online facility to the Cardholder to withdraw any e-mandate at any point of time after which no further recurring transactions shall be permitted for the withdrawn e-mandate.