The Reserve Bank of India has asked credit and debit card issuers to provide e-mandate facility to their customers for small-ticket recurring transactions. The new credit card and debit card rules came into effect from 1 September. This e-mandate facility was earlier available on bank accounts, allowing the financial institution to automatically debit the amount from the account. The e-mandate facility will be applicable for transactions performed using all types of cards – debit, credit and prepaid payment Instruments (PPIs), including wallets.
According to the RBI circular, the credit or debit cardholder can give a mandate to the card issuer for automated payments to a merchant. The maximum limit for a transaction under this facility is ₹2,000. No extra fees will be charged for providing this e-mandate facility on cards for recurring transactions.
However, this facility on credit and debit cards will be applicable only for recurring transactions – not for a ‘once-only’ payment.
A debit or credit cardholder who wants to opt for this e-mandate facility, will have to undertake a one-time registration process, with AFA (additional factor of authentication) validation by the issuer. For the first transaction in an e-mandate based recurring transaction series, AFA validation shall be required.
Subsequent recurring transactions shall be performed only for those cards which have been successfully registered and for which the first transaction was successfully authenticated and authorised, the RBI said. These subsequent transactions may be performed without AFA, it added.
If the debit/credit holder wishes to withdraw the e-mandate at a later stage, the cardholder will have to give an online facility to the cardholder to opt out.