Your Netflix, Prime, DTH Can Stop Working: Auto-Payments Via Credit/Debit Cards Ends

If you rely on auto-payments to pay your bills and recharges, this is for you – the RBI has now stated that an additional factor authentication (AFA) will now be necessary if you are using debit cards, credit cards, Unified Payments Interface (UPI) or other prepaid payment instruments (PPIs) for recurring transactions. 

A large chunk of our population depends on auto-payment for our bills and recharges, right from electricity and gas to music and movie subscriptions. Will these new rules create any confusion now? Read on to find out!

RBI Launches New AFA For Standing Instruction Payments

The apex bank has also introduced multiple rules for the auto-payment system, which will be effective from October 1. Banks have already started informing their customers about this new rule.

Axis bank’s notification reads, “As per RBI’s recurring payment guidelines, w.e.f. 20-09-21, Standing Instructions on your Axis Bank Card(s) for recurring transactions will not be honoured. You can pay the merchant directly using your card for uninterrupted service.”

The bank also states on its portal, “As per RBI guidelines on ‘Processing of e-mandate on cards for recurring transactions’, effective 1st October 2021, existing/new Standing Instructions which were/are registered without additional factor of authentication will not be processed. We shall be implementing the solution at the earliest.”

Complete List of New Rules By RBI For Standing Instructions

Here is a complete list of all the new rules implemented by the RBI:

1. Without the additional factor of authentication, no standing Instructions set up on your credit card and debit card (both domestic and international) will be processed.
2. Mandate registration, modification, deletion will also ask for additional factor authentication (AFA).
3. Customers will receive a pre-debit (SMS/e-mail) notification 24 hours prior to the debit
4. Customers will now be able to opt out of the transaction or mandate with the link that will be provided in the pre-debit card.
5. Customers will now be able to view/modify/cancel any standing instructions set on their card
6. A maximum amount can be decided by the customer for each standing instruction. In case the transaction amount is greater than the maximum amount assigned by the customer, the pre-debit notification will include a link for the customer to authenticate the transactions with AFA. Without this authentication, the transaction will not be processed.
7. Any recurring transactions of amount greater than Rs. 5000 will require AFA each time the amount is debited.
8. If standing instructions for bill payments are registered on your bank account, there wont be any new changes. However, if these transactions are on your debit or credit card, these will get declined from 1st October 2021. Ex. if SI has been given on Netflix, Amazon, Insurance payments, these SIs will be deactivated. However, if SIs have been given for Mutual Funds, SIPs, EMIs, they will continue as usual.