On Friday (10.01.2020), RBI notified that the instructions on the processing of e-mandate on cards for recurring transactions to cover Unified Payments Interface (UPI) transactions as well.

During August 2019, RBI permitted processing of e-mandate on Credit/debit cards / Prepaid Payment Instruments (PPIs)/wallets for recurring transactions (merchant payments), with Additional Factor of Authentication (AFA) during e-mandate registration, modification and revocation. In its communication RBI said that all the instructions / conditions outlined in the RBI circular dated 21.08.2019 would apply, mutatis mutandis, while processing e-mandate in UPI. The above instructions are “in line with the measures proposed for furthering digital payments”, the RBI release said.

An e-mandate for recurring transactions shall be registered with the issuer only after successful AFA validation, in addition to the normal process required by the issuer. The applicant has to submit all requisite information including the validity period of the e-mandate and other audit trail related requirements. During the registration process, the cardholder shall be given an option to provide the e-mandate for either a pre-specified fixed value of recurring transaction or for a variable value of the recurring transaction; in the case of the latter, the cardholder shall clearly specify the maximum value of recurring transactions, subject to the overall cap fixed by the RBI (currently ₹ 2,000/- per transaction). If the first transaction is being performed along with the registration of e-mandate, then AFA validation may be combined. Subsequent recurring transactions shall be performed only for those cards which have been successfully registered and for which the first transaction was successfully authenticated and authorised. These subsequent transactions may be performed without AFA.

The issuer would send a pre-transaction notification to the cardholder, about the name of the merchant, transaction amount, date / time of debit, reference number of transaction/ e-mandate, reason for debit, i.e., e-mandate registered by the UPI/cardholder through SMS, e-mail etc., at least 24 hours before the actual transaction takes place. On receipt of the pre-transaction notification, the cardholder shall have the facility to opt-out of that particular transaction/further transactions or the e-mandate. Any such opt-out shall entail AFA validation by the issuer. The post transactions details also notified to the card holder. In case particular transaction/ automatic subsequent successive transactions do not take place same has to be informed to the UPI/card holder.

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