Unable to make recurring payments via credit, debit cards?

5 MinsNov 24, 2021

Have you been getting a slew of notifications recently for recurring payments you had set up some time back? For example, for OTT platforms, subscription services, and others?
Don’t worry. You are not being spammed. This is happening because of the new norms mandated by the Reserve Bank of India (RBI).

via credit debit cards

Starting 1st October 2021, all recurring payments for services, including utility bills, phone recharges, DTH, and OTT platforms need an additional authentication factor. If you are paying your personal loan EMI via debit card, then those payments too would be impacted. 

How does this work?
Banks will send notifications 24 hours in advance to customers who will have to approve the transactions. The transaction will be carried out only once the customer has authenticated it.

Does this mean I will receive a notification every month?
No. For payments below Rs 5,000, customers will have to go through a one-time registration process, and once this is done, subsequent transactions will not require additional authentication. Customers also have the option to cancel the transaction anytime.

What if the payment is over Rs 5,000?
According to the new norms, if the payment is over Rs 5,000, banks will have to send an OTP (one-time password) to customers. This two-factor authentication will have to be done for every payment.

What happens if I don’t register?
If you don’t register and your consent is not received, the transaction won’t be executed.

Why is the RBI doing this?
Short answer: To prevent fraud. The RBI has observed that cases of online fraud have been increasing, especially on third-party platforms. The RBI believes that this e-registration will give customers more power and control over their online financial transactions.  

Does this affect my mutual fund SIPs or loan EMIs?
No, it doesn't. The auto-debit rules don't apply to standing instructions via bank accounts for investments in mutual funds via Systematic Investment Plans or your loan EMIs.

However, keep in mind that these rules will affect the insurance premium payments that you are paying through your debit or credit card.

If I still have doubts, how do I know what transactions will be affected and what won’t?
You’ll have to visit your bank website and check the list of merchants that fall under the new norms. For your Axis Bank cards, you may visit https://www.sihub.in/managesi/axisbank to see registered SI against your card. You will then have to re-register your debit or credit card for each merchant individually. This will let merchants charge your card as per the schedule if the amount is less than Rs 5,000. If it is Rs 5,000 and over, you will get an OTP before every payment.

What if merchants don’t enable their systems to the new norms?
If your merchants haven't enabled their systems, you will have to visit the merchants' site every time a payment is due. It is a pain, but in the long-term, it is a move that is beneficial in preventing fraud, so just grin and bear it for a short period.

Axis Bank is one of the few banks whose systems are entirely tailored to meet the new RBI norms on recurring payments. For more information, visit Axis Bank.

Disclaimer: The Source, a content creation and curation firm, has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.