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No OTP needed for recurring payments up to Rs 15,000

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The Reserve Bank of India has announced that electronic money orders for recurring payments have been increased from Rs 5,000 to Rs 15,000. The new improved limit has already come into force. The move comes days after the RBI, during its monetary policy committee meeting, announced the same for debit and credit card transactions. The decision to increase the limit came into effect a day ago.

The RBI, in a statement dated June 16, said on Thursday that the enhanced electronic money order limit will come into effect immediately. “The e-mandate framework prescribed an additional authentication factor (AFA), inter alia, when processing the first transaction in case of e-mandates/standing instructions on cards, prepaid payment instruments and payment interface For subsequent transactions with transaction values ​​up to Rs 5,000/- (AFA limit), the limitation of AFA has been lifted,” he said.

“Upon a review of the implementation of the e-mandate framework and the protection afforded to customers, it has been decided to increase the aforementioned AFA limit from Rs 5,000/- to Rs 15,000/- per transaction,” he said. the RBI said in its statement. “This circular is issued under section 10(2) read with section 18 of the Payments and Settlement Systems Act 2007 (Act 51 of 2007) and will come into force immediately,” added the central bank.

During his June 8 bi-monthly meeting on the MPC, RBI Governor Shaktikanta Das had notified the RBI’s plans to implement the decision.

“To further facilitate recurring payments such as subscriptions, insurance premiums, higher value tuition fees under the framework, the limit is raised from Rs 5,000 to Rs 15,000 per transaction,” said the Governor of the RBI during his speech of the day. “This will further leverage the benefits available within the framework and increase customer convenience,” Das added. The RBI said that with the electronic money order for recurring payments, users enjoy safety, security and convenience.

“With the (electronic money order) limit now extended to Rs 15,000, the subscription payment process will become simpler and more convenient. It would also allow recurring payments to become a standard for slightly higher payments like rent, maintenance, insurance premium, annual subscriptions, etc. Additionally, it will encourage more players to adopt the subscription framework, making the payment ecosystem more automated. A very encouraging move from the central bank, this should drive digital payments forward,” said Pranjal Kamra, CEO of Finology Ventures.

The RBI clarified that stakeholders had urged the central bank to increase the limit in the framework to facilitate higher value payments like subscriptions, insurance premiums, tuition fees, etc.

An electronic mandate refers to the act of a debit or credit card holder giving a standing instruction to the merchant platform like a website or mobile application to deduct a certain amount of money for recurring transactions . This includes subscriptions on OTT platforms, gas bill payments, electricity bill payments, etc. Through an e-mandate, the cardholder gives consent to merchant platforms to charge their credit or debit card for recurring payment requests that merchants may send.

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