Credit Card Recurring Payment Limit: Soon, no OTP, or different Additional Factor of Authentication (AFA), shall be required for making recurring funds above Rs 5000 via e-mandate on bank cards. The Reserve Bank of India (RBI) has proposed to extend the restrict for e-mandates on playing cards from Rs 5000 to Rs 15,000. Necessary directions on this regard shall be issued by the central financial institution quickly.
In its bi-monthly “Statement on Developmental and Regulatory Policies” in the present day (eighth June, 2022), the RBI famous: “The framework on processing of e-mandate based recurring payments, inter-alia, provides for an Additional Factor of Authentication (AFA) during registration, sending a pre-debit notification, subsequent recurring transactions to be executed without AFA, and an easier avenue to withdraw such mandates. Benefits of convenience, safety and security are available to the users. The system also benefits from users’ confidence. Major banks are providing the facility and the transaction volumes are seeing good traction.”
According to RBI, over 6.25 crore mandates have been registered beneath this framework, together with for over 3,400 worldwide retailers, until date.
Announcing the proposal to extend the recurring cost restrict, the RBI stated, “Requests have been received from stakeholders to increase the limit under the framework to facilitate payments of larger value like subscriptions, insurance premia, education fee, etc. To further augment customer convenience and leverage the benefits available under the framework, it is proposed to enhance the limit from ₹5,000 to ₹15,000 per recurring payment. Necessary instructions will be issued shortly.”
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Experts say that rising cap on e-mandate for card recurring cost will profit clients.
“Currently the recurring payments for credit cards is capped at 5000 Rs. This was creating a lot of issues for consumers with large ticket sizes like insurance premiums or even annual subscriptions etc. Earlier , this would have required an additional factor of authentication over Rs 5000. With the new rule, when in effect, this would ease the life of a lot of subscribers as well as the credit card companies who would increase the transactions,” Rohit Kumar, Founder and CEO of XPay.Life, a Blockchain enabled transaction firm, informed FE Online.
“This in turn will lead to a larger digital transaction footprint and therefore becomes beneficial for the economy. We believe this is a step in the right direction as taken by RBI,” he added.
With pre-paid cost devices and card transactions gaining traction, the RBI’s transfer in climbing cap on e-mandate for card recurring funds is being seen by consultants as an enormous determination.
“It is a win-win for both: banks and customers. The proposed enhanced limit from the older Rs. 5000 to Rs. 15,000 will empower customers to stay in control of their own recurring payments,” Muralidharan Srinivasan, Head of Payments, APMEA Region, FIS, stated
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“The future transaction experience for them will be hassle-free as recurring payments of high values up to Rs.15,000 will not need an additional factor authentications (e.g. OTPs), after registration. Additionally, e-mandate with the increased cap for recurring payments will become a standard for making many common payments from rent to receivables, various maintenance payments and possibly embed into emerging IOT functions,” he added.
Source: www.financialexpress.com”