Business Other News 09 Jun 2022 Soon, no OTP for e-m ...

Soon, no OTP for e-mandates upto Rs 15000 for recurring transactions

DECCAN CHRONICLE. | FALAKNAAZ SYED
Published Jun 9, 2022, 12:30 am IST
Updated Jun 9, 2022, 7:13 am IST
Higher e-mandate will help subscription based businesses and insurance companies
 Higher e-mandate will help subscription based businesses and insurance companies

Mumbai: Soon, no OTP, or other Additional Factor of Authentication (AFA), will be required for making recurring payments above Rs 5000 through e-mandate on both debit and credit cards. The Reserve Bank of India (RBI) has proposed to increase the limit for e-mandates on cards from Rs 5000 to Rs 15,000. Necessary instructions in this regard will be issued by the central bank, the RBI governor Shaktikanta Das said in his bi-monthly monetary policy statement on Wednesday.

Experts said that raising the limit for e-mandate on cards will facilitate the payment of larger value transactions like housing loans, insurance premiums or any kind of subscriptions. “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,” said Das.

“Till date, over 6.25 crore mandates have been registered under this framework, including for over 3,400 international merchants. 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,” added the RBI statement.

Dewang Neralla, chief executive officer of NTT DATA Payment Services India said, “Increased limit will lead to increased convenience for the consumers as well as businesses such as monthly pay-outs done for paying school/college fees, electricity bill payments, mobile payments, and lending organizations. The mandatory notification 24 hours prior to the auto-debit shall ensure that the consumer is warned ahead in time to maintain the requisite card balances.”

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Location: India, Telangana, Hyderabad




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