Effective from September 1, 2019, your credit card, debit card, prepaid payment instruments or e-wallets can be used to give standing instructions for recurring transactions of merchant payments. The Reserve Bank of India notified on August 21, 2019 that the card holders can provide e-mandate on cards for simple/automatic recurring transactions to the merchants. No charges shall be levied or recovered from the cardholder for availing the e-mandate facility on cards for recurring transactions.
As per the RBI guidelines, a cardholder who intends to opt for e-mandate facility on card shall undertake a one-time registration process, with Additional Factor of Authentication (AFA) validation by the issuer. The recurring transactions (for subsequent successive transactions) can be registered only after successful AFA validation for first transaction, in addition to the normal process required by the issuer. However, if the first transaction is being performed along with the registration of e-mandate, then AFA validation may be combined. In that case, subsequent transactions may be performed without AFA.
During the registration process, the cardholder has the 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 variable value of recurring transactions, 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) especially for ‘card-not-present’ transactions. Transactions above this cap shall be subject to AFA as applicable to ‘once-only’ card payment. In case the card holder needs any modification in existing e-mandate, same can be accomplished only after AFA validation by the card issuer.
In case of recurring transactions, the card issuer will send a pre-transaction notification to the cardholder, at least 24 hours prior to the actual charge / debit to the card through SMS, e-mail, etc. as desired by the card holder. As per RBI guidelines, the notification shall be in a clear, unambiguous manner and in an understandable language giving the details of 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 cardholder.
The cardholder is allowed to withdraw any e-mandate given by him/her through online facility provided by the issuer. However, the transaction which is already in pipeline for which pre-transaction notification has already been sent to the cardholder cannot be stopped. Further, any such opt-out shall entail AFA validation by the issuer.
RBI instructed the card networks that they shall make suitable arrangements to separately identify chargebacks / dispute requests in respect of e-mandate based recurring transactions and on limiting liability of customers in unauthorised transactions shall be applicable for e-mandated transactions as well.
