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New Auto-Debit Credit Card Rules From Tomorrow; Know The Changes

By
OB Bureau

New Delhi: Reserve Bank of India’s (RBI) new guidelines on e-mandates or recurring payments through credit cards come into effect from Friday, October 1.

Those cardholders who have issued standing instructions on their cards for online payments will be impacted. So consumers who used to avail of services through auto-debit facility — like OTT platforms Netflix, Hotstar, Amazon Prime, etc., utility bill payments like electricity, broadband, mobile phone bills – can no longer make payments this way.

However, the new rules won’t affect recurring transactions under e-NACH and UPI AutoPay.

RBI’s revised guidelines are meant to empower the cardholder so that payments can only be made with the due consent of the user.

All banks will have to notify the customers 24 hours in advance about their auto-debit transactions. Also, customers will have to authenticate the transactions.

RBI has capped auto-debit facility for transactions of up to Rs 5,000. If monthly auto-debit amount for any service/bill exceeds Rs 5,000, an additional factor of authentication (AFA) will be applied whereby a one-time password (OTP) will have to be used everytime a payment is to be made.

OB Bureau

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