If you make regular payments to merchants through debit, credit or prepaid cards, you can now set a mandate for automated payments, just like it is currently possible to do with bank accounts. However, there are certain conditions and steps to be followed.
As per the notification issued on August 21, the Reserve Bank of India (RBI) has permitted the processing of e-mandates on cards for recurring merchant payments from September 1, 2019. This means that the customer need not go through the two-factor authentication process every time a similar transaction is carried out with the same merchant.
The two-factor authentication involves a customer-generated password and a one-time-password provided by the issuer to complete a transaction. But now the customer can combine this process with the e-mandate and allow automatic processing of such transactions.
For this, the card user will be required to complete a one-time registration to set the e-mandate. An option will be given to provide e-mandate for either a pre-specified fixed value or a variable value. Any change in the mandate will need authentication again.
The maximum permissible limit for a transaction has been set at Rs 2,000. There will be no charges for availing this facility, the RBI said. It should be noted that the facility is only for recurring payments and not a ‘once-only’ payment.
The card user can withdraw the e-mandate at any point of time, the RBI said. “The exception to this will be a pipeline transaction for which pre-transaction notification has already been sent to the cardholder, but the debit has not been communicated to or received by the cardholder, and the e-mandate withdrawal happens during the interregnum,” the regulator clarified.
RBI said that the facility will be reviewed and may be extended to other digital modes of payments going forward.
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