With a time frame of less than a week, some merchants are yet to comply with the RBI’s new requirement of Additional Factor Authentication (OTP) for repeat payments.
According to a TOI report, around 75% of banks have installed the technology required to meet the RBI directive. However, some banks are still in wait and see mode.
Banks are informing customers that some transactions may fail.
“With effect from October 1, 2021, the Bank will not approve any standing instructions (e-mandate on cards for recurring transactions) given on the merchant website/app. HDFC Bank credit/debit cards, unless it is as per RBI-compliant procedure,” banks are already writing to customers.
Banks are advising the user to either pay on the biller’s website using OTP or use the bill-pay option for utilities.
According to Razorpay, a dozen banks have implemented the technology to alert the customer a day in advance in case of repeated payments, while providing them with a link to close the mandate, the same TOI report mentioned. Is.
Razorpay’s chief technology officer and co-founder Shashank Kumar said the RBI’s move could increase the recurring payments mandate off the charts, albeit with short-term disruption.
He said this directive serves two problems. Closing standing instructions to a merchant was a task at first, while some wrote by mail asking them to stop.
Furthermore, credit cards were mainly used for recurring payments while debit cards were not used as much.
After all, the international mandate will operate uninterrupted as neither the bank nor the RBI has jurisdiction over international billers even after October 1.
Kumar said the Indian market could grow manifold with the addition of 90 crore existing debit cards.
He said RBI has boosted the confidence of consumers by allowing them to stop payments whenever they want.
Online education and entertainment could be interesting, he said, as it enhances the service’s affordability by allowing them to have a monthly debit model instead of charging an annual fee.
Further, RBI has capped debits at Rs 5,000 per month, indicating that billers would need to increase the frequency to enable auto-debit.