Deadline on additional authentication on card payments extended to September 30 by RBI

New Delhi, Mar 31: the RBI's new rule on the deadline for additional authentication on card payments for recurring transaction have been extended to September 30. The deadline was to come into effect from April 1 onwards.

All scheduled commercial banks, card payment networks, prepaid instrument issuers and the National Payment Corporation of India have been notified by the RBI about the forthcoming regime that it first announced through a circular in August 2019. This would also be applicable for mobile payment wallets and platforms enabling UPI-based payments, the RBI had said.

The Reserve Bank of India (RBI) has, over the past decade, put in place various safety and security measures for card payments, including the requirement of Additional Factor of Authentication (AFA), especially for 'card-not-present' transactions. Recurring transactions based on standing instructions given to the merchants by the cardholders were brought, the RBI circular.

The RBI has been receiving requests from industry stakeholders to allow processing of e-mandate on cards for recurring transactions with AFA during e-mandate registration and first transaction, and simple / automatic subsequent successive transactions.

Keeping in view the changing payment needs and the requirement to balance the safety and security of card transactions with customer convenience, it has been decided to permit processing of e-mandate on cards for recurring transactions (merchant payments) with AFA during e-mandate registration, modification and revocation, as also for the first transaction, and simple / automatic subsequent successive transactions, subject to conditions listed in the Annex.

This circular is applicable for transactions performed using all types of cards - debit, credit and Prepaid Payment Instruments (PPIs), including wallets.
The maximum permissible limit for a transaction under this arrangement shall be ₹ 2,000/-.

All other instructions related to card transactions shall be applicable on these e-mandate based recurring card transactions.

No charges shall be levied or recovered from the cardholder for availing the e-mandate facility on cards for recurring transactions.

This directive, issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007), will come into effect from September 1, 2019.
This facility may be reviewed, in due course, for extension to other digital modes of payments.