Your Netflix, Hotstar Accounts Can Stop Working As Auto-Renewal Ends From This Date
Back in March, RBI extended the deadline for the processing of recurring online transactions by 6 months.
The extension was made since it was not being implemented as planned.
User Has To Manually Approve Recurring Payments
So from September 30, the new rule will come into effect.
The new rule was introduced in order to enhance safety and security of recurring, monthly transactional processes through the use of Additional Factor of Authentication (AFA).
It applies to transactions made via debit cards, credit cards, Unified Payments Interface (UPI) or other prepaid payment instruments (PPIs).
The recurring monthly payments which take place automatically for payments of subscription fees for Netflix, Amazon Prime, Disney+ Hotstar will now require the user’s permission.
So, instead of the subscription amount being deducted by default every month, the user will have to do so manually with the requirement of Additional Factor of Authentication (AFA).
AFA Not Required Every Month
AFA will come into play during initial registration of an app and first transaction.
This way, customers are protected from fraudulent transactions and the benefit of convenience.
Banks will now be required to notify customers about the recurring payments at least 24 hours ahead of the debit taking place through SMS or email.
The person will have to take the extra steps in authentication and verification compulsorily only for the first time.
Subsequent payments will not require one to go through the same process again.
The limit for auto-debiting from the customer’s card will be set to Rs 5,000.
For making transactions over this limit, a one-time password (OTP) will be needed for approval.
If a person wants to stop the recurring payment, they can opt-out at any time with no charges.
To that end, the issuer, i.e., one’s bank has to set up an online facility to withdraw any e-mandate at any point.
If banks fail to implement the new rules beyond the September-end deadline, they will be subject to strong supervisory action.