Your credit, debit card payments may stop from next month if you don’t do this
According to an official statement released by the Reserve Bank of India (RBI), financial firms would be required to obtain additional step verification from their customers for the auto-debiting feature starting October 1, 2021.
There will be a change starting next month for bank account users who use their debit/credit cards or mobile wallets for regular auto-debit activities. Any regular payments over Rs 5,000 would be subject to this rule.
Additional Factor Authentication (AFA) will be required under the new regulation, which is scheduled to be effective immediately from next month. Payments made with debit cards, credit cards, UPI, or any other prepaid payment device will be included. Banks and financial organizations will have to notify their customers at least 24 hours before the auto-deduction takes place.
The RBI in India has changed the date for e-mandates on regular internet transactions by six months, to September 30, 2021. The mandate was first published in August 2019 and then twice extended, including the recognition of Unified Payment Interfaces (UPIs). The banking regulator issued a new directive in March of this year, prolonging the deadline by another six months.
If the existing directive for auto-debit is from your bank account, keep in mind that it will have no effect on your mutual fund SIP, insurance premiums, or other regular payments. Debit and credit cards, on the other hand, will be susceptible to the new change in rules, so it’s necessary to stay informed and make sure the linked mobile number and email address are registered for those services.
Users who have to make auto-debit transactions for services like OTT platforms including Netflix, Amazon Prime, and Apple Music apps will be affected by the latest rule modification. It will also include monthly auto-Debit services such as cellular recharge bills, insurance payments, and other similar commodities. Remember that this is a monthly subscription authentication scenario and not a one-time payment authentication case.
Deadline for banks and other financial institutions has been extended
The Reserve Bank of India (RBI) has extended the deadline for institutions to adapt to the framework by six months, until September 30, 2021. According to the RBI, several stakeholders’ delays in implementing the policy have resulted in a risk of widespread customer annoyance and fallback. Any further delay in ensuring total compliance after the extended deadline would result in harsh monitoring action. The Reserve Bank has published a circular notifying of the above today.