The Reserve Bank of India has announced that e-mandates for recurring payments have been hiked from Rs 5,000 to Rs 15,000. The new enhanced limit has come into effect already. The move comes days after the RBI in its monetary policy committee meet outcome had announced the same for debit card and credit card transactions. The decision to enhance the limit has come into effect a day back.
The RBI in a statement dated June 16, Thursday, said the enhanced e-mandate limit will come into effect immediately. “The e-mandate framework prescribed an Additional Factor of Authentication (AFA), inter alia, while processing the first transaction in case of e-mandates / standing instructions on cards, prepaid payment instruments and Unified Payments Interface. For subsequent transactions with transaction values up to Rs 5,000/- (AFA limit), prescription of AFA was waived,” it said.
“On a review of implementation of the e-mandate framework and the protection available to customers, it has been decided to increase the aforesaid AFA limit from Rs 5,000/- to Rs 15,000/- per transaction,” the RBI said in its statement. “This circular is issued under Section 10 (2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), and shall come into effect immediately,” added the central bank.
In its June 8 bi-monthly MPC meet, RBI governor Shaktikanta Das had notified the RBI’s plans to implement the move.
“To further facilitate recurring payments like subscriptions, insurance premiums, education fees of larger value under the framework, the limit is being enhanced from Rs 5,000 to Rs 15,000 per transaction,” said the RBI governor during his speech on the day. “This will further leverage the benefits available under the framework and augment customer convenience,” Das added. The RBI has said that through e-mandate for recurring payments, users are provided with safety, security and convenience.
“With the (e-mandate) limit now extended to Rs 15,000, the process of subscription payments will become more hassle-free and convenient. This would also allow recurring payments to become a norm for slightly higher ticket size payments like rent, maintenance, insurance premium, annual subscriptions, etc. Moreover, this will encourage more players to adopt the subscription framework, making the payment ecosystem more automated. A very encouraging move from the central bank, this is expected to take digital payments one step further,” said Pranjal Kamra- CEO, Finology Ventures.
The RBI clarified that stakeholders had urged the central bank to increase the limit under the framework to facilitate payments of larger value like subscriptions, insurance premia, education fee, etc.
An e-mandate refers to the act of a debit or credit cardholder giving a standing instruction to the merchant platform like a website or mobile application to deduct a certain amount of money for recurring transactions. This includes subscriptions on OTT platforms, gas bill payments, electricity bill payments, etc. Through an e-mandate, the cardholder gives the consent to merchant platforms to debit their credit or debit card for recurring payment requests that merchants may send.
Read all the Latest News , Breaking News , watch Top Videos and Live TV here.
Comments
0 comment