Debit, Credit Card transactions may not succeed from next month
Read more to know the new rule to avoid failed debit and credit card transactions.
As per a release issued by the Reserve Bank of India (RBI), from October 1, 2021, onwards, banks and other financial institutions will have to acquire an additional factor authentication from their customers for the auto-debiting feature. This will apply to any recurring payments which exceed Rs 5,000.
Initially, the RBI had issued this mandate in August 2019 with a framework for processing e-mandates on recurring online transactions, which was applicable to cards and wallets. Later, it was extended to January 2020 to behold Unified Payment Interfaces (UPIs) as well. Then again in March 2021, the RBI has issued an additional mandate extending the deadline for the implementation by six months, making the last date to be September 30, 2021.
According to the new mandate which is set to come into effect from the next calendar month, any monthly transactions above the aforementioned limit will be subject to Additional Factor Authentication (AFA). This will encompass payments made through debit cards, credit cards, UPI or any other prepaid payment instruments (PPIs).
“The framework has not been fully implemented even after the extended timeline. This non-compliance is noted with serious concern and will be dealt with separately. The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default. To prevent any inconvenience to the customers, Reserve Bank has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021. Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action. A circular advising the above is being issued by the Reserve Bank today,” said the RBI.
