From October 1, the Reserve Bank of India’s new regulations for recurring payments on debit and credit cards come into play. If you have been employing your card to get OTT subscriptions such as Netflix, spend utility bills, spend insurance coverage premium, or get something via a recurring charge to your card, you have to have to spend consideration now mainly because your payments will most likely fail.
While OTT subscriptions or utility bills can very easily be paid for through options, it could be more painful to miss an insurance coverage payment which could lead to lapsed coverage. Automatic bill payments are an important aspect of our monetary lives mainly because the payment systems deal with the tracking and paying on our behalf. Without the standing directions we build for these payments, it’d be tough for us to preserve track of a variety of due dates, and the outcome would be missed payments and penalties.
What changed?
Last year, to boost the security of recurring, card-not-present transactions such as the payment of your electrical energy bill through your credit card, the RBI announced a new set of regulations. In it, the banking technique, on-line merchants, and payment gateways had to build and integrate into a single payment platform. This platform would also call for shoppers to register their billers afresh and build new standing directions for recurring payments which enable bills to be settled automatically through their cards. Per the new regulations, shoppers really should also obtain a text or e-mail alert about upcoming transactions along with a hyperlink containing facts of the bill that is to be settled through their card.
The hyperlink would provide alternatives to view, modify, or even cancel the transaction. Any recurring payment of above Rs 5000 would call for further authentication through OTP. The measures make card-not-present transactions safer and alert shoppers to upcoming payments which can now come about with their know-how and consent. With that, the discomfort of managing undesirable transactions is minimised for the buyer, bank, as properly as the merchant.
What now?
The RBI earlier intended the digital payment ecosystem to integrate into this new technique by April. However, the deadline was pushed to October 1. Therefore, now, one of the two issues might take place. One, your bank and your preferred on-line merchants (OTT platforms, music streamers, utilities, and so on.) have currently integrated into this new technique, and all you have to have to do is verify with your card issuer (generally your bank) about how to build new standing directions so that your bills continue to be paid on time through your preferred card. Or two, the integration hasn’t however occurred and you will have to settle your bills via option implies such as netbanking, UPI, or via any other implies acceptable to your merchants. Also, such option payments might be one-time payments, unless your merchant supplies you a way to make recurring payments.
What about non-card payments?
There are lots of approaches to automatically settle bills. Some shoppers use debit or credit card mandates. Some use UPI and bill payment web-sites. Many use the bill payment facility on their netbanking. The new RBI guidelines influence standing directions for recurring payments on credit and debit cards, UPI, and pre-paid cards. The guidelines will not influence standing directions issued through your bank account. Therefore, your SIPs, EMIs, or any other payments linked to netbanking really should continue to go via with out any challenge. You really should watch out for any communication concerning this from your bank and get clarity on this, just to be particular. You do not want to miss any critical payment.
Is my bank prepared?
Judging by the messages getting sent out by some massive banks, it appears the integration of a variety of payment tools is nonetheless a work in progress. If that remains the case even just after October 1, you would not be in a position to recreate your standing directions on your card, and options will have to be utilized. Therefore, you might preserve an eye on your payments and guarantee no bill payments linked to your debit and credit cards are missed. The new technique will call for you to undergo the one-time discomfort of setting up directions once again, but this will, on the complete, make your payments safer.
The writer is CEO, BankBazaar.com