Do you have a habit of opting for recurring auto payments from your debit, and credit cards, UPI and other wallets? If you have done so, please take note that your banks are unlikely to allow you to avail the auto payment operation from April 1.
Any auto pay transaction above Rs 5,000 will require Additional Factor of Authentication (AFA) just like you do two-step authentication while logging in to your Facebook account.
Bank Autopay Recurring Merchant Transaction Disabled? All You Need To Know
• This has come after Reserve Bank of India decided that recurring transactions using debit, credit cards, or Prepaid Payment Instruments (PPIs) or Unified Payments Interface (UPI) above Rs 5,000 would require Additional Factor of Authentication (AFA) from April 1. This means you will no longer be able to avail the autopay facility for your Netflix, Amazon Prime, or other OTT platforms. Any form of recurring transactions above Rs 5,000 to any merchant would require this Additional Factor of Authentication from April 1.
• On August 21, 2019, the RBI decided to bring in recurring transactions based on standing instructions given to the merchants by the cardholders within the ambit of Additional Factor of Authentication.
• Back then, the RBI stated that the norm was applicable for transactions performed using all types of cards – debit, credit and Prepaid Payment Instruments (PPIs), including wallets.
• RBI then fixed Rs 2,000 as the maximum permissible limit for a transaction under this arrangement. This meant any recurring transaction above Rs 2,000 required Additional Factor of Authentication.
• Subsequently, RBI also included recurring payments made through Unified Payments Interface (UPI).
• However, on December 4, 2020, RBI decided to extend the transaction limited within the ambit of Additional Factor of Authentication to Rs 5,000 from Rs 2,000.
• “Processing of recurring transactions (domestic or cross-border) using cards / PPIs / UPI under arrangements / practices not compliant with the aforesaid instructions shall not be continued beyond March 31, 2021,” RBI stated on December 4, 2020.