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RBI permits processing of e-mandate on credit and debit cards for recurring merchant payments

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India’s central bank, the Reserve Bank of India(RBI) has permitted processing of e-mandate on credit and debit cards along with Prepaid Payment Instruments (PPIs), including wallets for recurring merchant payments with AFA (Additional Factor Authentication, a security measure put in place for card payments that requires OTP – one-time password verification) during registration and 1st  transaction. It will come into effect from 1 September 2019.RBIKey points:
i. Applicability: Cards shall be only for recurring payment transactions and not for a ‘once-only’ payment.
ii. Transaction limit:  The maximum permissible limit under this payment system shall be Rs 2,000 per transaction.
iii. Banks will not charge from the cardholder for availing the e-mandate facility on cards for recurring transactions.
iv. Pre-transaction notification:  The cardholder will be given facility to choose a mode among available options like SMS, email, etc., while processing e-mandate on the card, for receiving the pre-transaction notification from the bank. The feature for changing this mode of receiving a pre-transaction notification shall also be provided to the cardholder.
v. Post-transaction notification: It will provide the cardholder about the name of the merchant, transaction amount, date/time of debit, reference number of transaction/ e-mandate, reason for debit.
vi. Withdrawal of e-mandate:  If the card holder wish to withdraw the e-mandate or the particular transaction, they will have to give an online facility to the cardholder to opt-out.
vii. Dispute resolution and grievance redressal: In order to facilitate the cardholder to lodge grievances, the card issuer shall be put in place an appropriate redress system. They shall also put in place dispute resolution framework for resolving these disputes with clear turnaround time.