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How to wade through new auto-debit rules

Customer consent is now required for recurring payments of over Rs 5000.

Published: 25th October 2021 04:47 AM  |   Last Updated: 25th October 2021 04:47 AM   |  A+A-

RBI

The Reserve Bank of India. (File photo | PTI)

Express News Service

NEW DELHI:  The Twitter/social media space has been full of complaints of late, by aggrieved users who have not been able to renew their subscriptions – either with an OTT platform, a newspaper/magazine or hosting space for a website.

After RBI’s e-mandate guidelines on recurring payments from debit or credit cards came into existence, people have been facing problems with many periodic payments/renewals, which earlier used to happen on their own.

New guidelines require all such recurring payments over Rs 5,000 mandated through credit or debit cards should seek consent from the customer through additional authentication in the form of One-Time-Password. This has caused certain amount of inconvenience to customers, many of them not finding it difficult to pay their utility bills, insurance premiums or renew subscriptions of OTT platforms or news websites. But not everyone is complaining.

Subhasree Mazumdar (35), an HR professional who was till recently actively looking for a job change, had taken the paid services of LinkedIn, a professional networking website. Within a month, she was able to land a new job, and she did not feel the need for the paid services of LinkedIn. However, she kept forgetting to stop the service, and for three months she paid around Rs 5000 a month.

There are many like Subhasree, who subscribe to paid services of some or other website using the recurring payment mode through credit or debit card. Many of them do not remember to stop and keep paying for them without using the services.

Some experts say that the RBI’s recent guidelines on recurring payment might add a bit of inconvenience but it gives more control to the customers as far as payment of these services are concerned. All one need to do is make some adjustments.

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You might already have been getting messages from your services providers, who likely would be impacted from the new guidelines. Banks are also sending mails and SMS alerts about the changes/tweaking needed to be made to continue availing different services without any hindrance.

OTT platforms like Amazon and Netflix have been providing alternate ways of payment. When The New Indian Express contacted Netflix for issues their customers are facing with the new guidelines, they refused to make any comment but they shared with us a list of instructions issued to their clients.

“If you choose a recurring payment method, Netflix may ask you for a one-time re-authentication 1 - 7 days before your next billing date, then your Netflix membership will automatically be charged each month,” says the instruction issued by Netflix.

It further says that debit and credit cards must be enabled by banks for recurring e-commerce transactions. It also says that one would have to ‘enable’ the cards for international transactions. Amazon asks its Kindle subscribers that in order to continue the auto-renewal for subscriptions and make recurring payments, choose an alternate eligible payment instrument and re-subscribe for a recurring Kindle Unlimited subscription by logging into the Amazon account.

In case of all the transactions greater than Rs 5,000 or if the bill amount is greater than the deductible limit set by you while signing up for a subscription, you will also receive an OTP from the bank. You will have to approve all such transactions by logging into the bank’s website.

Typically, you can view all your standing instructions in one place. Go to the credit/debit card section of the bank website. You will find the link to standing instructions and recurring transactions. Once you are inside this page, you can click on manage recurring transactions, and approve transactions greater than Rs 5,000.

Once you have clicked the approve button, the bank will send you an OTP to complete the transaction.
However, auto-debit mandate of only those merchants/billers would be approved who are compliant with the RBI guidelines. The list of all such billers and merchants would be available on your bank website.

One must remember the new guidelines pertain only to recurring payments mandated through credit and debit cards and they do not in anyways impact your EMI or SIP payments, which are initiated through the special mandate given to the banks.

What you need to know about the rules

The new guidelines ensure better safety and control over your standing instructions for the payment of utility bills, phone bills, insurance, DTH and OTT

New auto-debit guidelines affect only recurring payments through credit/debit cards

Payment of SIPs, home loan EMIs debited through bank accounts are not to be impacted

Mandatory Additional Factor Authentication (OTP) for a bill amount higher than Rs 5000 is required

Your bank will only allow auto-debit of merchants or billers who comply with new RBI guidelines



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