Millions of customers who have set up recurring auto-debit payments for various online payments are likely to face trouble, as these payments may disrupt from 1st April, 2021.
It is expected that payment volumes worth over Rs 2,000 crore across sectors, including card, utility bills, OTT and media subscriptions along with MSMEs and corporates, have to be affected in April.
This is because of the Reserve Bank of India’s (RBI) new rules for enabling Additional Factor Authentication (AFA) for recurring payments through debit and credit cards, the deadline for which expires on 31st March, 2021.
As per the new rule banks are required to send a notification to customers five days prior to the payment being deducted and allow the transaction to go through only after the customer approves it. For recurring payments above Rs 5,000, banks are also required to send a one-time password (OTP) to customers.
Accordingly, the Internet and Mobile Association of India (IAMAI) has warned that millions of customer e-mandates could fail from 1st April, 2021, as most major banks have not taken requisite steps to comply with the RBI’s requirements.
Till then, customers will have to pay bills or subscriptions by visiting the payment pages of individual merchants. However, recurring payments using UPI’s Auto Pay feature won’t be affected.
Knowledge Source:
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