By Anshul Sept 29, 2021 10:17:16 AM IST (Published)
The change in rules means those who use the auto-debit facility on their cards for recurring payments are likely to see transactions fail from October 1.
Banks will be changing the auto-debit payment rules from October 1, 2021 as a part of the new security features mandated by the Reserve Bank of India (RBI). The change in rules means those who use the auto-debit facility on their cards for recurring payments are likely to see transactions fail from October 1.
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Several lenders including HDFC Bank and Axis Bank have started informing their customers about the change in the auto-debit payment rules.
For the uninitiated, any recurring transactions debited automatically from debit, credit, or prepaid cards will require explicit approval before the transaction goes through starting next month. The bank will have to notify customers via SMS, email, or both, and can make the transfer only after customers approve the same.
These e-mandates on cards will be processed via a common industry-wide platform that ties together banks, merchants, and card networks. The work is still underway to put all these together. Hence, until all the stakeholders are on board, recurring payments will be affected, said Adhil Shetty, CEO of BankBazaar.com.
He said that users now have two options: The first is to manually make a one-time payment every month on the merchant site via a saved debit or credit card, while the other option is to use the net banking portal to set up auto-pay for utilities and other services that require recurring payments directly from the savings or current account instead of the card.
Also, it’s important to note that this is only for recurring payments of less than Rs 5,000. For payments above that amount, Shetty said, customers may have to recreate the mandate and authenticate the transaction again. So, it would be best to wait for operational details from banks in this case.
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