6 MinsJan 28, 2022
Graphic designer Armaan is digitally savvy. He has multiple subscriptions and payments linked to his Axis Bank credit card. These include subscriptions for his e-mail accounts and two design software services; a recurring payment for his website hosting; and premium payments for his term life and health insurance policies. It’s no wonder, then, that he finds it difficult to keep track of his various payments, including his credit card payments. In fact, he has missed out on them a few times and has faced a disruption in services, as well as late fees on his credit card.
That is when a friend told Armaan about Autopay feature on his credit card. If you, like Armaan, didn’t know about this feature, read on to learn more.
What is Autopay Facility?
An autopay facility is a convenient form of payment available on credit and debit cards. It is one of the best solutions for recurring payments, and can help you avoid late fees or disruption of services.
Benefits of Autopay:
1. Never miss a payment deadline again: When you set up a payment, Autopay ensures that the amount is automatically charged to your card. So, you will never miss out on deadlines and consequently, never face a disruption in your services.
2. Pay off your credit card bill: A critical feature of Autopay is that almost all credit card companies offer customers the option to pay off their credit card statement when it is due. This means that Armaan can easily set up an Autopay feature to pay off his credit card bill on the due date. He can choose the amount he wants to pay every month (minimum due or full amount).
3. Improve your credit score: When you pay your credit card bill on time, you are establishing a credit record and a solid credit score. This improves your credit history.
[Also Read: Unable to make recurring payments via credit, debit cards?]
Conditions to keep in mind while using Autopay
Recently, the Reserve Bank of India announced new guidelines for recurring payments made through credit cards or e-mandates. These will impact those using auto-debit facilities to clear any kinds of bills, online subscriptions, or online payments. The RBI intends to impose additional factor authentication (AFA) on recurring transactions involving debit cards, credit cards, and other prepaid payment instruments (PPIs).
The changes under the new guidelines include the following:
1. All recurring payments that have already been set up will require an additional factor of authentication (AFA). If the AFA is not completed, the charges will not be processed.
2. Registering, modifying, or deleting any standing instruction will also require an AFA to complete the process.
3. Individuals using the autopay facility will receive a pre-debit notification at least 24 hours before the debit in the form of an SMS or an e-mail sent to the registered mobile number or e-mail address, respectively.
4. A link will be sent along with the pre-debit notification that allows individuals to cancel or stop the transaction from going through.
5. All kinds of standing instructions set on the debit or credit card can easily be viewed, modified, or cancelled at any time.
6. Individuals will also be able to set a maximum amount for the auto-payment. Payments that exceed the specified maximum amount will require an AFA through the link provided on the pre-debit notification. Failure to authenticate the payment will cancel it from being processed.
7. All recurring transactions over the cost of ₹5,000 will require an AFA for the payment to be processed.
8. Standard Instructions, or SI's, for bill payments registered to the individual's bank account, will not be affected by the new guidelines. However, if the SI's are registered to credit or debit cards, payment will soon be declined or deactivated.
One of the main benefits of these changes is the added layer of security which requires you to confirm large payments before they are processed. This is done through a notification sent to you. The pre-debit information ensures that you know all the payments that are being processed. Further, the additional factor authentication ensures that only you can confirm payments to be processed. This also acts as a reminder if you wish to cancel any fees or subscriptions.
Armaan is now happy. He had started using his Axis Bank credit card for his regular payments so that he could earn reward points and maintain a healthy card utilisation ratio. The Autopay facility will ensure this happens seamlessly and he can continue using his Axis Bank credit card.
Axis Bank offers a range of credit cards with various benefits tailored to its customers' preferences. Customers can also earn Edge Reward points depending on their spending patterns and redeem them for attractive deals and offers. Learn more about Axis Bank Cards online.
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.