The automatic recurring payments for multiple services will be barred from 1 April as the the Reserve Bank of India (RBI) has made Additional Factor of Authentication (AFA) compulsory from 31 March.
The RBI had in December last year directed the banks including RRBs, NBFCs, and payment gateways that the processing of recurring transactions (domestic or cross-border) using cards or Prepaid Payment Instruments (PPIs) or Unified Payments Interface (UPI) under arrangements/practices not compliant with AFA would not be continued beyond 31 March 2021.
The RBI move come as part of risk mitigation measure to bolster safety and security of card transactions.
Under the new norms, banks will have to notify customers in advance with regards to any due recurring payment. The transaction will go through only after the user’s authentication and approval. Moreover, the banks will have to send a one-time password (OTP) to carry out a recurring payment in excess of Rs 5000, reports Indian Express.
So the transaction would not be automatic but would be done after authentication from the customer.
However, the banks and payment gateways are currently seeking additional time from the RBI to comply with these latest norms.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.