The Reserve Bank On Tuesday issued consolidated guidelines for e-mandates for digital payments, making an additional factor of authentication mandatory for processing such transactions. The central bank also mandates issuers that customers can’t be charged for availing of the e-mandate facility for recurring payments.
The new framework applies to all payment system providers and participants handling recurring payments, both domestic and cross-border, through credit/debit cards, prepaid payment instruments, or using UPI with immediate effect, the central bank said in the direction.
Under the new framework, a customer opting for e-mandates must complete a one-time registration process.
“A customer opting for e-mandates shall undertake a one-time registration process. Such mandates shall be registered only after successful validation of additional factor of authentication, in addition to the normal process required by the issuer,” the direction said.
The RBI also said recurring transactions exceeding Rs15,000 will require additional authentication. Also, payments such as insurance premium, mutual fund subscriptions, and credit card bills above `1 lakh will also need the extra layer of verification.
Further, the first transaction under any e-mandate must be authenticated with an additional factor, the RBI said, adding that payments under e-mandates will not be subject to any separate limits or controls set by customers.
Each e-mandate will carry a defined validity period and allows the user to modify or cancel it at any time—the flexibility which RBI wants the issuer to clearly communicate to customers during registration.
E-mandates can be set for fixed or variable amounts within RBI prescribed limits. For variable mandates, issuers must enable customers to define a maximum transaction value and any changes to an existing mandate will require fresh authentication.