The Payments Council of India (PCI) which represents the players in the payments and settlements systems welcome the move of Reserve Bank of India (RBI) of allowing processing of e-mandate on cards for recurring transactions. “This RBI directive would drive the growth for subscription-based recurring payments and will reduce failure rates besides bringing convenience to consumers”, says Naveen Surya, the Chairman Emeritus, PCI & Chairman, Fintech Convergence Council.
To address the changing payment needs and the requirement to balance the safety and security of card transactions with customer convenience, RBI released a circular on August 21, 2019 to permit processing of e-mandate on cards for recurring transactions (merchant payments) with AFA during e-mandate registration, modification and revocation, as also for the first transaction, and simple/ automatic subsequent successive transactions with the cap of transactions amounting to INR 2000 and subject to a few other conditions.
Vishwas Patel, Chairman PCI said, “We are thankful to RBI for giving clarity on recurring payments. However the cap of Rs. 2,000 is low for many subscription/ bill payments/ education fees etc. Further, electricity bills from commercial shops/ offices/ 3bhk plus residences in metro cities are in excess of Rs. 2000 per month and will not have the facility of automatic recurring payments due to this cap. Hopefully RBI will give it a re-look and increase the cap in the near future.”
He added, “We would have appreciated if RBI had included UPI as a payment option in the above circular for recurring payments. UPI 2.0 is a non-starter because RBI has blocked its biggest feature recurring billing.”