Mastercard enables recurring payments to offer a hassle-free experience for Bank’s cardholdersOctober 21, 2021 | India
This helps issuers and merchants comply with the RBI guidelines on the processing of e-mandate on cards for recurring transactions
Mastercard today announced the enablement of recurring payments / standing instructions on its debit and credit cards. With this announcement, the company is bringing another layer of simplicity and seamlessness to the payments process across the entire ecosystem, while ensuring that transactions remain safe and secure.
This announcement builds on the Reserve Bank of India’s (RBI) circular on ‘Processing of e-mandate on cards for recurring transactions’ dated 31st March 2021, which seeks to improve the safety of recurring payments for card-not-present transactions. Effective October 1st 2021, cardholders can conveniently manage their e-mandates including:
- Receiving text/email notifications about due recurring payments and confirmation of their processing
- Modifying an e-mandate or stop payment of a specific transaction
- Having a single window view of the various e-mandates set up by them.
The new rules permit processing of recurring transactions with OTP during e-mandate registration and automatic processing of successive transactions of up to ₹ 5,000/- for a transaction. Through a simple and frictionless interface, any cardholder can easily modify the duration of their recurring payments, manage the amount or cancel the standing instructions at any point in time.
Google, Netflix, Policybazaar, and Spotify are among multiple merchants across various categories, where recurring card payments have been enabled. More merchants are being added every day.
Recurring payments on Mastercard Cards are already supported for the following issuer (customer) banks: SBI Debit Cards, HDFC Bank [Debit and Credit Cards], Citibank [Debit and Credit Cards], ICICI Bank [Debit Cards], Induslnd Bank [Credit Cards], RBL Bank [Debit and Credit Cards], Axis Bank [Debit and Credit cards], YES Bank [Credit Cards] HSBC Bank, Equitas Bank, and Karur Vysya Bank . Mastercard is working with BillDesk, PayU and Razorpay to enable this mandate across its partner banks and merchants.
India is a market with vast potential for recurring payment needs. The Payments and Settlements Data released by the RBI in its latest annual report shows that the total volume of digital payments in non-cash payments increased to 98.5 percent during 2020-21 as compared to 92.5 percent during 2017-18. Owing to this shift, various fintech players have built capabilities to connect diverse stakeholders to support seamless recurring payment transactions by managing mandate lifecycle, sending pre-debit notification, and including merchants and payment aggregators to widen the scope of acceptance.
Recurring Payments FAQs
1. What is a recurring payment transaction?
Recurring payments take place when you authorize a merchant (example: OTT service providers, mutual fund houses, insurance, and telecom companies etc.) to automatically charge bank’s credit or debit card on a prearranged schedule (monthly, weekly, daily, or annually) for goods or services that they offer. To make such payments, you or your card does not have to be physically present (card-not-present) at the time of the actual transactions.
2. What are the current amendments about recurring payments, and why are banks making these changes?
To improve the safety of card-not-present payments, the Reserve Bank of India (RBI) issued a circular on the processing of e-mandate on cards for recurring transactions. As per the mandate, starting from October 1, 2021, you will receive a text or email alert about upcoming recurring transactions on your card along with a link containing the billing details, and an additional factor of authentication (AFA) is mandatory. In addition, the link provides options to view, modify, or even cancel the transaction.
According to the new RBI mandate, recurring transactions will be permitted only if your issuing bank has initiated the request.
3. Is this modification only applicable to new recurring transactions, or does it also apply to the existing ones?
The change will apply to all recurring transactions, whether old or new. Please check with your issuing bank if you need to register a new recurring payment request or have any doubts about your ongoing recurring payments.
4. How will the new RBI regulations change the way I make my recurring payments?
You may experience the following changes:
- Pre-transaction notification: Starting October 1 2021, you will receive pre-transaction information from your issuing bank at least 24 hours before the amount is deducted. The notification will contain the merchant's name, transaction amount, date/time of debit etc.
- Processing of the first transaction and subsequent recurring transactions: You need to enter the OTP during the first transaction and for all following transactions above INR 5,000. After the first transaction authentication, all the recurring payments below INR 5,000 will be processed without any OTP.
- How to stop a recurring payment: Your issuing bank will provide you with an online facility to view/modify/withdraw any e-mandate at any point in time.
- Recurring transaction decline: All recurring transactions (domestic or international) for existing or new e-mandates that do not adhere to the new rules will be declined. Please get in touch with your issuing bank to know whether it is ready with the latest systems to adhere to the RBI mandate.
5. Why are my recurring payment transactions getting declined?
Kindly check with your issuing bank if the existing or new recurring payments are declined due to non-compliance with the latest RBI regulations.
6. Will I be charged if my recurring payment declines due to non-compliance?
Please contact your issuing bank or merchant/product/service provider to understand the charges (if any) for a declined recurring payment transaction.
7. What will happen to my recurring international transactions?
Suppose any International Merchant/ Product/ Service Provider does not adhere to the RBI's mandate on processing e-mandate on cards for recurring transactions. In that case, regular payments pertaining to them will be declined, irrespective of the amount. Please contact your issuing bank to know the outcome of such transactions.
8. Will my existing subscription expire when RBI guidelines kick in after October 1?
The issuer bank will deny any existing standing instructions for recurring transactions that do not match the regulatory standards, beginning October 1, 2021. Please get in touch with your issuing bank/merchant to know more.
9. Whom do I contact if my recurring transactions are declined?
Please contact your issuing bank or merchant/product/service provider with whom the standing instruction (s) has been set up.
10. Is it possible to delete/cancel/edit the mandate?
You can delete/cancel/edit a recurring payment authorization granted to a merchant by following the respective mandate procedure listed on the Merchant Agreements page. To avoid unwanted charges for a recurring payment, ensure that you cancel at least 3-5 days before your next scheduled payment.
11. Which all merchants are complying with the RBI requirement?
Please get in touch with your merchant/product/service providers (or check their website/app) to learn if they are following the new RBI mandate and will be able to support recurring transactions in the future.