Banks to reject e-mandate on cards for recurring transactions from Oct 1
The standing instructions not to be approved cover those given at merchant website / app, on bank credit card/debit card, unless it is as per RBI compliant process
Banks and payment aggregators are informing customers that from 1st October 2021 they will not approve any standing instructions (e-mandate on cards for recurring transactions) given at merchant website / app, on bank credit card/debit card, unless it is as per RBI compliant process. Banks are saying they are taking this step to safeguard customers.
The Reserve Bank of India (RBI) has put in place new safety and security measures for card payments.
The new conditions prescribed by RBI require a cohesive effort by all stakeholders, including card issuing banks, merchant acquiring banks, card networks and merchants. All constituents must complete the development, integration and deployment of a common platform fully compliant with the RBI guidelines.
Merchants are also informing customers about the need to verify your card to continue to enjoy services that require recurring payments. For instance, YouTube has sent a communication to YouTube Premium users. Thankfully, the card verification will be needed just once.
“In compliance with the regulatory requirements, we are currently building a solution to seamlessly manage all your domestic standing instructions for recurring payments. This solution will be available soon for you. Starting October 1, any existing standing instruction for domestic and international recurring transactions on your card account will not be processed. We request you to make these payments directly to the service providers to avoid any interruptions,” American Express said in a recent message to customers.
“A common industry-wide platform is being developed, and lenders such as HDFC Bank have completed internal development and integration. The bank is now working jointly with merchants to make this platform live for customers at the earliest,” HDFC Bank said.
Many banks are sending communications to customers saying that they will have to make payments directly to merchants.
Until the common-industry wide platform goes live, here are a few interim solutions to make your payments:
You can make the payment on Merchant Website/App with your Bank Credit/Debit Card and authenticate the transaction via OTP.
You can use Netbanking portal to register your Electricity / Water / Gas / LPG / Landline telephone / Postpaid mobile / DTH / Broadband / Insurance billers for auto payments via BillPay service such as HDFC Bank Billpay.