In a relief to banks and wallets, RBI has recently extended the timeline for processing recurring online transactions by 6 months. Now banks and financial institutions have time till September 30, 2021 to implement the new framework.
RBI said, “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 30 September, 2021,”.
To make digital payments in India “safe and secure”, RBI introduced Additional Factor of Authentication (AFA). The recurring transactions using debit cards, credit cards, Unified Payments Interface (UPI) or other Prepaid Payment Instruments (PPIs) will require an additional factor authentication (AFA) from April 1, 2021, RBI earlier mentioned.
Under the new norms, banks will have to notify customers about recurring payments at least 24 hours prior to the actual debit to the card. The notification can be sent to the users via email or SMS. To carry the transaction for the first time, a nod from customer is compulsory. However, this extra step can be avoided for the subsequent transactions, RBI mentioned. The limit for auto-debit from cards and wallets, is set at Rs. 5,000.
For transactions above the cut-off, an additional OTP will be needed. The user will have an option to “opt-out of that particular transaction” at any point. Banks and wallets cannot levy any extra charges on customers for opting or withdrawing recurring payments. The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience, RBI clarified.