The ruling is set to be applied to banks and financial institutions offering credit cards, debit cards, and other prepaid payment instruments.
A new Reserve Bank of India (RBI) rule will come into place from April 1. Due to this, you may have problems making bill payments from your account - mobile, utility, and other bills as well as subscription charges for OTT platforms.
The new rule, which requires additional authentication for recurring transactions using credit cards, debit cards, UPI, or other prepaid payment instruments (PPIs), could affect millions of customers.
Initially, the rule was planned on recurring transactions worth up to Rs 2,000. The RBI, however, announced in December 2020 that on the basis of requests from stakeholders, the limit was raised up to Rs. 5,000.
Transactions above that cut-off will require an additional one-time password (OTP).
The ruling is set to be applied to banks and financial institutions offering credit cards, debit cards, and other prepaid payment instruments.
It will also be applied on mobile payment wallets and platforms enabling UPI-based payments.
In August 2019, RBI notified all scheduled commercial banks, card payment networks, prepaid instrument issuers, and the NPCI about the big change.
Banks and payment platforms offering recurring transactions will have to send a notification to customers at least 24 hours before the first transaction is debited.
The mode of notification (SMS, email) will be chosen by the consumer at the time of registering the e-mandate for recurring payments.
That notification will essentially need the customer's consent upon which the issuer will be able to proceed with the payment.
Subsequent recurring transactions may take place without that extra step.
Banks are expected to decline these automatic payments and users will have to make manual transactions to complete bill payments.
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 "Card payment disruptions from April 1?")
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