New Delhi: Auto-payments of your mobile and utility bills as well as subscription charges to any of your favourite over-the-top (OTT) platforms are likely to get disrupted starting Thursday, April 1 as the Reserve Bank of India (RBI) is bringing a new rule for recurring transactions.
“Processing of recurring transactions (domestic or cross-border) using cards / PPIs / UPI under arrangements / practices not compliant with the aforesaid instructions shall not be continued beyond March 31, 2021,” RBI said its circular.
Once applied, the new rule will require banks and payment platforms offering recurring transactions to send a notification to customers five days before that transaction is planned to be debited. That notification will essentially need customers’ consent — upon which the issuer will be able to proceed the payment.
The ruling is set to be implied on not just banks and financial institutions but also on mobile payment wallets and platforms enabling UPI-based payments.
The RBI said in its initial circular that it had been planning to bring an additional factor of authentication (AFA) on recurring transactions made through credit and debit cards and prepaid payment instruments such as mobile wallets.
Although the original circular was sent to the banks, card payment networks, and prepaid payment instrument issues, the RBI extended its new rule to platforms enabling unified payments interface (UPI) based payments in January last year.
Initially, the rule was planned on recurring transactions that are up to Rs. 2,000. The RBI, however, announced in December that on the basis of requests it received from stakeholders, it decided to increase the limit recurring transactions not requiring AFA up to Rs. 5,000. The bank also introduced the March 31 deadline.