With the intention of promoting digital transactions and payments via debit cards or credit cards, the Reserve Bank of India (RBI) has come up with a new facility for cardholders.
It has allowed card issuers to offer an e-mandate facility to its customers. With this facility, recurring small-ticket payments to a merchant through debit, credit and prepaid cards would be really easy. E-mandate facility is currently available with bank accounts and this facility allows the financial institutions to automatically debit money from the bank accounts.
This new rule which is going to be live from 1st September is applicable for all transactions which are carried out through debit card, credit card and prepaid payment instruments (PPIs) including wallets.
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Here is what the new rule says:
1. For automated payments to a merchant, you can give a mandate to the card issuer. Under this facility the maximum transaction limit is Rs 2,000.
2. This e-mandate facility on debit cards, credit cards, and e-wallet can be used only for recurring transactions and not for a ‘once-only’ payment.
3. For availing e-mandate facility on your debit and credit cards for recurring transactions, you will not be charged extra money.
4. If you want to avail this facility on your debit and credit card, you must go through a one-time registration process, with AFA (additional factor of authentication) validation by the issuer.
5. AFA (additional factor of authentication) will be done for processing the first transaction in an e-mandate based recurring transaction series.
6. The following recurring transactions are carried out only if the card has been successfully registered and the first transaction was successfully authenticated and authorized.
7. Following transactions are performed without AFA (additional factor of authentication).
8. At a later stage, if you would like to withdraw the e-mandate, you would have to give an online facility to the cardholder to opt-out.
9. When you withdraw the e-mandate, the card issuer makes sure that the merchants delete all details, including payment instrument information.
10. RBI has told that card issuers should have an appropriate redressal system to help cardholders lodge their complaints. For resolving these disputes the card issuers must put in place a dispute resolution mechanism.
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